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Italian Consumer Watchdog Sues Microsoft Over 'Windows Tax'

An anonymous reader writes with this quote from El Reg: "[An] Italian consumer watchdog is suing Microsoft over the 'Windows Tax' – the near impossibility of an ordinary user getting a refund if they decide to delete Microsoft's software from a new computer or laptop. The class action case says Microsoft makes it too difficult for people who buy a computer with Microsoft software on it to remove that software and get their money back. Most users do not realise that starting the software means you have accepted the end user licence."

49 of 313 comments (clear)

  1. Updated TOS by SilverHatHacker · · Score: 5, Informative

    I recently bought a Sony VAIO laptop. I was somewhat surprised to see that Windows 7's license agreement now says "contact the manufacturer and find out their refund policy" rather than "contact the manufacturer for a refund". Not only that, underneath it was a separate agreement from Sony which said, in a nutshell, that it was all or nothing. Looks like somebody got tired of actually having to keep their promises to us nerds.

    --
    Funny may not give karma, but +5 Informative never made anyone snort coffee out their nose.
    1. Re:Updated TOS by Frosty+Piss · · Score: 2, Insightful

      If you don't want to pay for Windows, don't buy a machine with Windows. I haven't paid for Windows in over 10 years. I buy a new machine just about every years. But not ones that come with Windows.

      Why no noise about being able to buy a Mac without whatever Macs run?

      --
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    2. Re:Updated TOS by Simon80 · · Score: 2

      Yeah, it's been like that since Vista, and I also find it annoying and objectionable. I was told by a fellow student last fall that they had some success buying laptops without Windows by calling the OEM's sales line and demanding it as a condition of sale. I haven't had a chance to try this yet, and I don't know whether this works for machines in e.g. the bi-weekly specials that Dell likes to rotate, but I'm definitely going to try it on the next laptop I get, and so should any non-Windows-user who is buying direct from an OEM. The path to a company's heart is through their sales department.

    3. Re:Updated TOS by Locke2005 · · Score: 4, Insightful

      Right... just try buying a new laptop without Windows preinstalled... it seriously limits your choices! In fact, it's usually cheaper to buy a laptop on sale and throw away the Windows license than it is to buy one without Windows preinstalled!

      --
      I've abandoned my search for truth; now I'm just looking for some useful delusions.
    4. Re:Updated TOS by lbates_35476 · · Score: 2

      First, because IMHO there is nothing that runs better on Macintosh than OS X. If Windows were as good as OS X, there would be less of a problem with this. Secondly, the hardware and OS comes from a single company (Apple) so I believe there's more leniency with the bundle. Thirdly, there's no retail/OEM pricing available for OS X because it isn't sold as a separate product.

    5. Re:Updated TOS by Missing.Matter · · Score: 2

      it's usually cheaper to buy a laptop on sale and throw away the Windows license than it is to buy one without Windows preinstalled!

      So if Windows makes computers cheaper, what exactly is the Microsoft tax?

    6. Re:Updated TOS by Missing.Matter · · Score: 2

      I believe either Staples or Office Max doesn't have 15% restocking fee. I forget which, I get them confused.

    7. Re:Updated TOS by sjames · · Score: 5, Insightful

      It doesn't make laptops cheaper, it just makes inexpensive laptops a bit less inexpensive. The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs. That, in turn, is why people are getting fed up with the Windows tax.

    8. Re:Updated TOS by click2005 · · Score: 4, Insightful

      Dont forget they earn a few dollars installing Norton, a few more for the MS Office trial version, browser toolbars and other crap-ware.

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    9. Re:Updated TOS by Anonymous Coward · · Score: 2, Funny

      Dunno, but you can definitely get one without windows.

    10. Re:Updated TOS by Locke2005 · · Score: 2

      True; the first thing I have to do with every new prebuilt computer is uninstall the Norton 30-day trial and install Microsoft Security Essentials. But does the bribes the company gets for preinstalling trial software really exceed the money they pay for the Windows 7 license?

      --
      I've abandoned my search for truth; now I'm just looking for some useful delusions.
    11. Re:Updated TOS by CohibaVancouver · · Score: 2

      having people complain they want to buy MacOSX without the hardware

      ...but can't you just go to Amazon or wherever and buy a shrink-wrapped version of OS X?

    12. Re:Updated TOS by dhavleak · · Score: 3, Interesting

      The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs.

      There are some unstated assumptions in that statement. I don't know what the real numbers are, but here are some thoughts:

      Suppose OEMs did offer a simple checkbox for wheter you want Windows pre-installed:
      1. Some % of people buying laptops want Windows on it -- let's say x%
      2. Some % of people buying laptops don't want Windows on it -- let's say y%
      3. Some % of people buying laptops have no clue and will go with whatever is cheapest (i.e. will exclude windows w/o realizing what they're doing, if it was offered as an option by the OEM) -- z%

      For x%, the economics remain mostly unchanged. For y% the economics improve due to no Windows OEM price. For z% the purchase just got quite painful because they saved the OEM price, but now they need an OS, and they are no longer eligible for OEM pricing. Worse -- they get angry at the OEM that sold them a useless machine, and vow never to do business with them, and they spend a lot of time (i.e. spend a lot of OEM's money) on the phone with support trying to figure out what the hell is going on.

      The final economics for the OEM depends on the exact percentages of x%, y% and z%, and the final number for how much z% costs them in support calls, alienated customers (future sales), etc. Of course, you also need to factor in the same thing for the y% folks.

      There's also a built-in assumption here, that the z% will want Windows -- but it's not a stretch -- not everyone has a nerd at hand to install Linux and configure it to make it work for them.

      I don't know the answers to these questions -- but I do question the veracity of the statement that MS's licensing arrangements make purchasing an OS-less laptop more expensive. I think if this wasn't slashdot, an assertion like that would need more substantiation. I suspect that OEMs would offer whichever options give them the best combination of customer satisfaction, and profit margins. The checkbox to purchase w/o Windows being absent certainly does mean that it costs more for them to give us that option -- on this we agree. But the actual cause of that cost is what I am questioning here.

    13. Re:Updated TOS by sjames · · Score: 2

      The answer is to ACTUALLY provide the refunded license cost if you wipe the drive rather than accepting the EULA. X remains happy. Y gets their money back, and Z never knew it was an option but it looks like the one at work, so it must be OK.

      I have no doubt the OEMs are selecting the most profitable option, but that's only because MS is doint things like telling them to install Windows on 100% of their machines or the price per machine doubles. That may not be the exact deal happening now, but MS making deals like that is a matter of public record.

    14. Re:Updated TOS by weicco · · Score: 2

      I would guess the answer is Ubuntu. Their shareware is written for Windows. Now if Ubuntu had market share of Windows, or at least somewhere near, things would be quite different.

      --
      You don't know what you don't know.
    15. Re:Updated TOS by ErroneousBee · · Score: 2

      Why no noise about being able to buy a Mac without whatever Macs run?

      Because Apple has not gone about forcing exclusive deals onto every significant hardware manufacturer in the market. This case is about exclusive and exclusionary deals between Microsoft and PC sellers and its effect on the end consumer.

      --
      **TODO** Steal someone elses sig.
  2. now look at the mac os tax by Anonymous Coward · · Score: 4, Insightful

    now look at the mac os tax
    it has to be at the most $1500-$500 on the mac pro.

    1. Re:now look at the mac os tax by dmacleod808 · · Score: 2

      I agree with you there... I have 5 machines running OSX at the moment. TWO of them are older Apple machines runing 10.4 Tiger. The other THREE are off the shelf PCS running 10.6.6 Snow Leopard Total for 2 desktop machines and a netbook? A little over 2500 dollars.

      --
      There Can Be Only One...
    2. Re:now look at the mac os tax by icebike · · Score: 2

      Not germane.

      Apple builds the computer and the OS.

      Microsoft does not build computers.

      --
      Sig Battery depleted. Reverting to safe mode.
  3. Re:don't blame Microsoft by Shikaku · · Score: 2

    Furthermore, how can someone prove they removed Windows 7 from a computer they bought?

    You don't activate it. When you turn on your computer for the first time it asks to activate it. It's that simple.

  4. Re:Buy Only What You Want by grantek · · Score: 5, Insightful

    I don't expect a refund on the skin of an onion that gets peeled and promptly thrown away.

    Yes, but the farmer doesn't pay a third party to add skins to their onions, thus increasing the cost of onion production. They may pay Monsanto, but without going too far off topic, that system's just as screwed up.

  5. Re:Good luck with that... by Farmer+Tim · · Score: 5, Funny

    Way to go ADUC.
    They might not get very far, but I will cheer them on.

    Well, if it walks like ADUC...

    --
    Blank until /. makes another boneheaded UI decision.
  6. To be fair, not a Microsoft problem by microbee · · Score: 3, Insightful

    Microsoft makes deals with PC manufacturers, who then bundle Windows and sell to end customers. If you buy such a PC, and don't want Windows, you should talk to your manufacturer instead. Why is it an issue for Microsoft to deal with, or make it convenient for you to get a refund from your PC manufacturer? It just doesn't make sense.

    So sue the manufacturer instead.

    1. Re:To be fair, not a Microsoft problem by grantek · · Score: 4, Insightful

      The problem is Microsoft uses bully tactics and abuse their monopoly to bend the manufacturers to their will. MOST people who buy laptops want or don't mind using Windows on them, so to be competitive in the laptop market you have to have a good price on your laptop+windows bundle, and if you want a good deal on Windows, Microsoft's exclusivity agreements then stop you from offering any other alternative.

      The legal challengers are trying to say that a laptop as a piece of hardware is separate enough from Windows that you shouldn't be allowed to force it on people.

    2. Re:To be fair, not a Microsoft problem by sjames · · Score: 3, Interesting

      MS freely offered to provide a refund if you choose not to agree to the terms of the EULA. They then reneg on that offer if you actually take them up on it, even if you bought the laptop with the understanding that the option existed.

      They try to pass the responsibility off to a 3rd party that had no part in the EULA.

      Since then, there have been cases where the OS and hardware are claimed to be offered as an all or nothing bundle, but that may not be legal everywhere and, of course, there is a question of actually getting your free refund should you not agree with the T&C you can only see by turning the laptop on.

    3. Re:To be fair, not a Microsoft problem by JAlexoi · · Score: 2

      [Citation Needed] Two separate convictions from US DoJ and EC's Competition commissioner.

  7. Italian Law? A refund is not the same! by redelm · · Score: 2

    I do not know Italian law, but I would not expect an outcome similar to Anglo-American law. AFAIK, they mostly use a "code" approach to the law, the codes dating back to the Romans and being used as generally guiding principles for the judges who have more discretion than common-law courts.

    The fundamental problem for MS and the bundling mfrs is that a refund is not the same as a non-sale. It might be a remedy, but the money has been paid, and the negotiating power is reversed.

    If, for instance, I boot my new machine from a USB key or CDROM, I might never see any notices of refund. Such a clean boot would be a very reasonable precaution to avoid running MS software and avoid a possible allegation of "use".

  8. Re:Buy Only What You Want by Tubal-Cain · · Score: 2

    Not many prebuilt computers have the price, specs, and OS we want.

    Some computers, like laptops, can't usually be assembled at home.

  9. starting the software means... by hAckz0r · · Score: 2, Insightful

    ...you have accepted the end user licence

    Funny, I thought that is what liveCD's and OS installation software was for?

    Actually, I got so $%&&%$## off a year ago when I bought my last (as in never again) Dell and I was forced to purchase a 64 bit copy of Windoze just to get the amount of memory I wanted. Even though they knew I was going to wipe whatever they put on the disk drive as soon as it arrived I still had to pay the ransom/extortion fee. I never looked back. My next machine was an HP with twice the memory and a blank disk drive. Speak with your wallet, as that is the only language they truly understand.

    1. Re:starting the software means... by atomicbutterfly · · Score: 2

      Windoze

      Off-topic, but why is it that the words "Windows" and "Microsoft" are still deliberately mangled when people who particularly dislike the product/company talk about them? It's 2011 already - it's not funny or cute anymore. Do these people distort the names of other companies and products they don't like? What makes Windows/Microsoft special?

      The sign of a mature discussion is when you can refer to things you don't like without having to resort to childish mechanics like deliberate mangling of words. I doubt people who actually know enough soft skills resort to name calling, as they're aware it immediately turns people off their position.

    2. Re:starting the software means... by noidentity · · Score: 2

      I was forced to purchase a 64 bit copy of Windoze just to get the amount of memory I wanted. Even though they knew I was going to wipe whatever they put on the disk drive as soon as it arrived I still had to pay the ransom/extortion fee.

      How do any of these words apply? It's just that they offered you a crappy deal: we will only sell you this memory upgrade as a package deal with a copy of Windows. Companies offer crappy deals all the time, but they aren't forcing you to do anything, demanding a ransom for something that's yours, or obtaining something from you through force or threats. My strategy for dealing with crappy deals is to not accept them, and to buy from businesses that offer good deals. But I have no right to good deals; it's up to the business how they want to sell their property.

  10. Re:Buy Only What You Want by flaming+error · · Score: 4, Insightful

    > Why buy a computer with Windows when you want a computer without Windows?
    Why buy an onion with skin when you don't want the skin?

    > I don't expect a refund on the skin of an onion that gets peeled and promptly thrown away.
    The onion skin doesn't cost $129.95 when purchased separately. Nor does the grocery store deliberately add the skin and pay Microsoft for the privilege.

  11. Re:To be fair, not a Microsoft problem *IS*TOO* by redelm · · Score: 4, Informative
    This comment would be correct except for one very inconvenient fact -- Microsoft has been adjudged a monopolist in the EU (and US but penalties were reduced).

    Contrary to popular impression, monopolies are not illegal. But they are restricted by law from doing things (mostly that would preserve or extend the monopoly) that are perfectly legal for other companies.

    Tying or "bundling" is one of those illegal things that monopolies must not do. Selling their product as part of another sale. Software, including should be a sales choice ("Do you want Windows with that?") and invoice line-item.

    How the boxen are configured and shipped is a separate matter. It would probably not be illegal to ship a machine with MS Windows pre-installed (and even stickered) even though the OS was refused at sales time and no price was paid for it. Quiet about virus! This would not authorize use, although a gift recipient might have an innocent user defense.

  12. Re:Kind of absurd in my view... by uglyduckling · · Score: 4, Informative

    The theory is, Microsoft makes it very difficult for manufacturers to sell computers without Windows. In the past Microsoft has been proven in court to have been strong-arming OEMs into not selling computers with other OSs, or no OS, because for most OEMs their core business is computers with Windows pre-installed, and they don't want to lose their favourable volume discount from Microsoft.

    I don't know if this still goes on now, but it is really difficult to buy an off-the-shelf PC with no OS. Arguably the situation is a bit different now than it was 10 years ago, Linux is very much on the radar as is Mac OSX. However, countries differ in their competition and consumer protection laws, and it may well be that, in Italy, it's possible that the current situation runs foul of those laws/regulations.

    To answer some of the other posts here asking why no-one complains about OSX, well - maybe some people would like to buy a Mac without an OS. This isn't the point though - it's very difficult to force a company to sell a certain combination of their own products. The issue here is that the MS Windows / Generic PC combination is two different products from two different companies, and that could run foul of competiton and consumer protection rules.

  13. Re:Kind of absurd in my view... by gstoddart · · Score: 4, Informative

    I don't understand the basis for this.

    In the US, it was from a court case that basically said people had the right to buy a computer without having to pay for a Microsoft OS they're never going to use.

    Microsoft had argued that anybody buying it without an OS was going to pirate Windows anyway, so they should get paid.

    Basically, it was found to be uncompetitive behavior and harmful to the consumer as it was nearly impossible to NOT end up paying Microsoft around $100 on every new computer sold.

    I know death to MS...etc..Now where can I buy an iphone without IOS preinstalled?

    Except, Microsoft doesn't sell branded PCs, and as part of the anti-trust settlement they made, they agreed to stop doing that.

    You can't buy a Windows 7 phone without an OS on it either -- it's a completely specious argument in this case.

    --
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  14. Re:We've been needing this for a long time by Fnord666 · · Score: 2

    Unless this guy has some evidence to show that Microsoft are using anti-competitive strategies to maintain their marketshare, ...

    Well it wouldn't be the first time now would it?

    --
    'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
  15. Just argue for a discount... by inanet · · Score: 2

    Last time I bought a computer it was via Dell,

    I rang them up and argued about the fact I didnt want windows.

    they argued it was built into the price.

    at the time windows home premium was around $250 odd, so I said I wanted $200 off the price, whether or not windows was installed.

    it was easier for them to discount me the price of windows (and I doubt it costs them that much per computer) than it was for them to sell me a laptop without windows.

    so forget about trying to get it without windows, the main thing is to not have to pay for it!

    --
    "This is my Sig. there are many like it but this one is mine."
    1. Re:Just argue for a discount... by joocemann · · Score: 4, Insightful

      But in a consumer-activism sense, you failed. You still let Dell take your money (albeit discounted) and pay M$ for the OS. M$ still got paid, and while it was indirect, you voted for more M$ with your dollars.

      To some people this matters... Maybe not you, which is totally fine.

  16. Refund != Discount by nut · · Score: 2

    I recently bought a Dell Zino HD from Dell NZ. I did it over the phone, so I could ask for the Windows licence to be refunded - there is now way to do it on the website of course.

    The first operator didn't really know how to handle my request and asked if they could call back. When I did get called back I was offered a discount to the value of the Windows licence. So presumably Dell ended up paying Microsoft for a licence on my purchase anyway.

    I'm guessing that Microsoft have insured themselves in the agreements with the system builders and distributors in this way. I don't know how you would go about finding out what the content of those agreements really is though.

    --
    Never trust a man in a blue trench coat, Never drive a car when you're dead
  17. The geek returns to Never-Never Land. by westlake · · Score: 2

    The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs. That, in turn, is why people are getting fed up with the Windows tax.

    Bare bones doesn't sell worth shit.

    While Walmart.com finds it profitable to stock 240 Win 7 laptops and 89 desktops. None of them high end product.

    The OEM Windows PC benefits from enormous economies of scale.

    In manufacturing. In marketing.

    The OEM Windows PC benefits from the fact that it is sold as a ready-to-run home appliance and not a kit of parts.

    You buy the Win 7 laptop knowing that the sound will work. That ain't always true with Ubuntu.

    There is damn little evidence that talk of the "Microsoft Tax" rings anyone's chimes but the geek's. Top 5 Operating Systems

    1. Re:The geek returns to Never-Never Land. by sjames · · Score: 5, Insightful

      Absolutely none of that explains why they can't refund you the cost of the license if you wipe the drive.

    2. Re:The geek returns to Never-Never Land. by Vanderhoth · · Score: 2

      I asked to buy my last laptop without windows. I was told they couldn't sell the laptop without it, but I could send in a request for a rebate later. After which I found out how difficult getting the rebate was. I eventually gave up after a little over a year and decided it wasn't worth the money to go to court. Besides, who do you sue? The electronics store that told you about the rebate that does exist, but is just very difficult to get, or the manufacture who does give a rebate if you jump through their hoops long enough.

  18. Re:Car Analogy by whoever57 · · Score: 2

    And if you buy a new Chevy, you cannot remove the stereo system and return it to the dealer for a refund of that $1000 it supposedly costs.

    But you can remove the stereo and sell it through eBay (although Chevy is probably trying to figure out how to stop that trade). Try re-selling your OEM license of Windows!

    --
    The real "Libtards" are the Libertarians!
  19. a couple of sources for Linux boxes by bcrowell · · Score: 4, Informative

    Here are a couple of places from whom I've bought linux boxes: http://system76.com/ , http://www.zareason.com/ Based on my extremely small sample size, I've found system76 to be a little better in terms of quality, but I've seen lots of positive comments about both of these businesses on the web.

    Of course I realize that the existence of alternatives doesn't mean that Microsoft isn't massively exploiting its monopoly power over the market ("monopoly" in the legal sense, which does not require 100% market share). But if nobody bothers to buy from the alternatives, then I can sure as heck guarantee you that the situation will get worse, not better.

    Some big retailers such as Fry's, Target, and Walmart have tried selling linux machines. As far as I've been able to tell, none of them have been successful, and I don't think the failure has anything to do with strong-arm tactics by MS. A while back, Fry's used to sell linux machines for $180-250 that were actually pretty decent. I bought several of them (one for my father, one for my daughter, etc.), and they lasted a long time and gave yeoman service. But they stopped selling them, and when I asked one of the salespeople at Fry's he said that they'd had so many returns that it wasn't profitable. Realistically, what was happening was that a lot of people were buying them, wiping linux off the hard disk, and installing a bootlegged copy of windows. Then when the windows install didn't work correctly, they would return the machine. This wasn't subtle at all. The machines came with a custom linux distro (ThizLinux) that nobody in the U.S. had ever heard of and that didn't even have a web page in English. The docs that came with the machines consisted of five pages of instructions on how to install windows, and no info whatsoever on how to use the linux that came preinstalled.
    Walmart was selling the gPC for a while. I bought one, and although the hardware was decent, the quality of the software integration stank to high heaven.

    What the smaller sellers like system76 and zareason are doing right is to stop trying to invent their own crappy linux distro and just ship their machines with ubuntu, which works. Another thing they're doing right is to market their computers to people who actually want to run linux, as opposed to people who don't know about, don't care about, or don't want linux.

  20. Re:Buy Only What You Want by CastrTroy · · Score: 2

    I think the only way to resolve this is for the manufacturers to ship some kind of general hardware testing software that works regardless of which OS you are using. That way they could do some better analysis on what's wrong with your computer, even if you installed Linux on it. They they could offer software support for the preinstalled operating system, and if you installed something else, it's up to you to support. Only thing they have to ensure is that the hardware is working.

    --

    Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
  21. How much would it cost, if Windows didn't exist? by Kaz+Kylheku · · Score: 2

    Even if you don't use Windows, you benefit from the economy of scale created by millions of Windows-using PC users around the globe who create the demand for PC's.

    Also, because Windows is big, bloated and slow, this has created massive consumer demand for more powerful hardware.

    The upshot is that you wouldn't have a PC which is as cheap, as fast and with as large a memory as what you have today if it were not for Windows.

    Even the fact that Windows is preinstalled on PC's is a piece of streamlining which saves the industry as a whole money (remember, most users end up with Windows: this is just the principle of optimizing the frequent case!)

  22. Re:Car Analogy by xororand · · Score: 2

    Try re-selling your OEM license of Windows!

    Fortunately this is not a problem in some countries, e.g. Germany, where Microsoft cannot enforce any restrictions on OEM software. It can be resold just like "retail" software.

  23. Re:To be fair, not a Microsoft problem *IS*TOO* by redelm · · Score: 2
    Depends on the nature of the licencing agreement between the PC mfr and MS. Some of the older ones (still in force?) had mfrs paying MS assuming all machines had MS-OSes. Definitely tying _by_ MS in crafting that agreement.

    Given that history, both MS & the mfr would have to prove there was no bundling. Quite easily done if theirs always a sales-question asked and invoice line-item. Much more difficult if not. Yes, this is guilty until proven innocent, but that is precisely how the US Sherman and Clayton (antitrust) Acts are crafted, interpreted and enforced.

  24. Re:How much would it cost, if Windows didn't exist by Whuffo · · Score: 2

    That's an apologist argument. It assumes that none of the development of computers would have happened without Windows and that's an invalid conclusion. Saying that Linux distributions are too hard to use overlooks the significant changes in the user interface that MS makes at each of their nearly-forced upgrades. It's just as big a change from XP to Ubuntu as it is from XP to Vista and requires just as much training or attitude adjustment. I'm not using Linux right now; I'm using Vista (yuck) because this Sony laptop came with it and Linux drivers for this hardware are elusive. Would I upgrade to Windows 7? Maybe for free - the same price that I'd pay for a Linux distribution.