Advanced

Windows refund - the next episode: Thoughts on a 2007 pan-European action

Posted by hkwint on · 88 comments
LXer.com; By Hans Kwint, The Netherlands
Mail this story
Print this story

LXer Feature: 28-Feb-2007

Linux on OEM desk/laptops is a hot item these days. Dell started to ship corporate desk/laptops without Windows pre-installed lately.

Nonetheless, this is too little and too late, costumers should be able to buy any lap/desktop without Windows pre-installed. Furthermore, the secret trade deals Microsoft made with the OEM's, which effectively make it impossible for / forbids OEMS to ship desk/laptops without Windows - are forbidden.

Therefore, a new pan-European Windows refund action should be started. In this article, I will share my new insights on the legal aspect of this action, since there are a lot of new things I found out after the last article I wrote on the subject. After that, I'll show my plan to do something about it. In short, it reads: Call aunty Neelie and try to get rid of our almost criminal uncles Bill and Steve.

Legal frame of reference

In my previous article on this topic, I still had the assumption pre-installing Microsoft Windows with a desk/laptop can be interpreted as forbidden tied sales. However, tied sales are not always forbidden; and while it's sure pre-installing Windows is tying sales, it's unsure if this belongs to forbidden tied sales or not.

Therefore, we should rephrase our complaint, and try to make it plausible Microsoft and the OEM's break the European competition laws. The best instruments we have for this, are the famous laws 81 and 82 of the EU treaty. So, there we go:

Article 81 of the EC Treaty (ex Article 85)
  • 1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:


    • (a) directly or indirectly fix purchase or selling prices or any other trading conditions;

    • (b) limit or control production, markets, technical development, or investment;
    • (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
© European Communities, 1995-2007 Reproduction is authorised, provided the source is acknowledged, save where otherwise stated.
Now, let's look at how Microsoft violates this terms.
  • If we look at term (a), we could say Microsoft fixes the prices of OEM versions of Windows which are sold to the End-Users, by means of their contracts with the OEM's. This is, if we assume the OEM is a 'reseller' of the OEM version of Windows, and doesn't add any value to the software, which it probably doesn't.
  • Looking at term (b), I immediately think about how Microsoft tried to forbid Dell to ship non-OS lap/desktops[1]. Therefore, this agreement limits / controls the market, and also technical development and investment.
  • The clause of the agreement with Dell in which Microsoft stated, Dell wasn't permitted to ship desk/laptops without OS, looks like a supplementary obligation which has no connection to the subject of the agreement - at least to me. Therefore, it infringes rule (e).

Now, the 'evidence' we got, that Microsoft forces OEM's to only sell desk/laptops with an OS, dates back from 2002. Nonetheless, we can assume these clauses still exist in the agreements Microsoft makes with the OEM's today. However, we can't find that out, since we aren't able to read those agreements, because they contain 'secret information', Microsoft will probably say. 'If Dell knows HP pays less per Windows OEM license, they would be stupid to pay more, and therefore the agreements are trade secrets, and part of our IP', I already hear Microsoft say. Because of these assumed trade secrets, they can throw in any dirty clauses into these agreements without anyone knowing it.

It's time this changes, and at least the Competition Directorate-General should have insight in this agreements, to make sure they are legal under European law. That's difficulty number two: Those agreements are probably reached in the US, so what happens if they infringe on European laws? I can't answer that question at the moment, though I know Microsoft OEM license agreements to parties (OEM's) in the EU are between the OEM's and 'Microsoft Ireland Operations Limited'. Most of the OEM's are based in the United States however. Enough about article 81, let's move on to the next EU treaty article, number 82. It looks a lot like article 81, but is a tiny bit different:

Article 82 of the EC Treaty (ex Article 86)
  • Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States.

    Such abuse may, in particular, consist in:

    • (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
    • (b) limiting production, markets or technical development to the prejudice of consumers;
    • (d)making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
© European Communities, 1995-2007 Reproduction is authorised, provided the source is acknowledged, save where otherwise stated.
This article almost claims the same as article 81, but there is a difference: article 81 prohibits certain kinds of agreements between undertakings, while article 82 prohibits the abuse of a dominant market position, and in claim (b) especially in relation with customers. Thinking about this, the following argument came to my mind:
One Windows OEM license costs more per license, than one hundred-thousand licenses cost per license. This is logically, and normal behaviour in a free market. However, this can only be justified if the selling party isn't a convicted monopolist, in my opinion. It can rather easily be understood, this pricing scheme limits production and markets to the prejudice of customers. The less Windows desktops a large OEM sells, the more they pay per Windows license, and the more the consumer will end up paying for his desktop. Since the dominant position the Windows operating system has, it effectively costs the cosumers who buy a lap/desktop with Windows pre-installed money if the OEM would sell desktops without Windows. That's only in practice, not in a legal sense. Nonetheless, the Competition Directorate-General should consider this in my opinion.

HOWTO: TODO

So, though I'm not a lawyer, I think Microsoft and the OEM's might infringe on some European treaty articles. Please notice, in contrary to Microsoft claiming Linux infringes on certain things, I exactly state where they infringe on in my opinion, and how. But, only some real lawyers can find out whether Microsoft infringes or not. As I don't have money to pay some lawyers to find that out, the only thing I can do is ask the Competition Directorate-General to examine my assumptions. Therefore, we could use a complaint Form C. This seems like the proper way to do it to me.
If you think my goal is to convict certain companies, well, you're wrong. My goals are certain demands are met by the OEM's, and those demands are very reasonable:
  • Consumers should be able to buy a lap/desktop without Windows. This means:
    • OEM's should offer lap/desktops without Windows, or
    • OEM's should have a return policy, which enables customer to decline the Windows EULA on a desk/laptop with Windows pre-installed. After they decline it, it should be a straigt-forward process to receive a refund for the unused Windows license. Moreover, this process should be free of whatever cost for the customer. That might sound logical, but at the moment, some OEM's enable a refund, but the customer pays for transportation of his lap/desktop back and forth to the factory, and the 'technical cost' of the removal of the Windows software and the sticker, if present. The customers ends up paying more for this removal costs, than he receives as a refund, so effectively, the refund costs money! This can't be the goal of a refund.
  • Consumers should know how much a Windows OEM license actually costs them. This is because, in my opinion, Windows is a separate product from the computer, though hardware-parts like hard disks are not. On the other hand, people might ask why they can't, for example, receive a refund for a wireless card they don't use, if they return it. That's a tricky issue, but it should suffice to say, almost all hardware makers aren't convicted for anti-trust, and don't have a dominant / monopoly position.
Now, a 'HP manager says HP is committed to delivering working products', and a desk/laptop without an OS installed isn't a working product. Therefore, people could argument, Windows isn't a separate product. Well, I'm sorry to them, but that's sóóóóó yesterday! Today, I can buy a desktop without an OS, with a formatted harddisk, and use it for years without installing an OS on the harddisk, by means of a LiveCD/DVD a LiveUSB stick, an old fashioned floppy, the PXE netboot protocol, or whatever. Even Windows can be converted to a bootable LiveCD, though the legal status of that is a bit unsure.
Then, all we have to do, is to ask the OEM's to meet those demands! If they don't, we can still call in aunty Neelie. I'll do this the same way as I did the Dutch Windows refund survey I did earlier, only this time I will write to all European 'headquarters', and I'll send all the letters by registered mail straigt away, instead of e-mailing two times, writing unrecorded letters, still having no answer after two months, and then eventually sending registered mail. If there are people willing to share in the cost (about one hundred euro's totally probably), please let me know. I'll probably give the headquarters about a month to react, before adding the results to my complaint to the Directorate-General. And remember, no reaction from the OEM's is also a reaction, since it tells quite a lot.

Conclusion

Hang on, wait till I finally have some time, courage and energy to start this new action somewhere in the next month, and put up with the long time the OEM's will need to react, or not react at all, as most of them did last time. I plan to post the answers at LXer. In the mean time, please register at Dell IdeaStorm, and add your vote to the (at this time) 91.000 people asking for Dell lap/desktops with pre-installed Linux. Not that you were going to buy a Dell of course (I hope), but we could make sure Dell understands how big the demand is, and change the impuls of the 'elephant traveling almost by lightspeed' by promoting that idea.



[1]
  • C|NET news, May 3, 2002, Joe Wilcox , 'Can Microsoft play nice with PC makers?'
    "For example, to receive lucrative marketing discounts--$10 per copy of Windows, down from $12 last year--they must adhere to strict hardware configuration guidelines and agree to ship an operating system on every computer they sell."
  • WindowsITPro, Aug 15, 2002, Paul Thurott, 'Dell: No-OS PCs Aren't Designed for Linux'
    "Dell previously offered no-OS PCs and workstations to large customers, but Microsoft's new licensing policies, which went into effect August 1, forbid this arrangement."
  • Slashdot, Aug 10, 2002, 'Some SysAdmin', 'Dell No Longer Selling Systems w/o Microsoft OS'
    "Effective 8/26 - New Microsoft contract rules stipulate that we can no longer offer the "NO OS" option to our customers beyond September 1st."
Windows® and Microsoft® are registered trademarks of Microsoft Corp. Linux® is a registered trademark of Linus Thorvalds. However, things might change as Linus Thorvalds is trying to acquire Microsoft Corp. The usual IANAL / TINLA disclaimers apply.

  Nav
» Read more about: Story Type: Announcements, Editorial, LXer Features; Groups: GNU, Linux, LXer, Microsoft

» Get new stories by e-mail: nightly or as they are published

« Return to the newswire homepage

  Related stories
» More like this

Comments (88)

You can't pick and choose your elements

1 earlier comment in the full thread.

You're misusing Art 81. by over looking that it is about distorting trade between member states. So an agreement by Microsoft that in the UK for example Vista costs £1 but you are not allowed to resell it anywhere else in Europe would have that affect. Because you could build machines at tens of Euros less than other places in Europe. Hence PCs from the UK might be cheaper.

But even then they might claim similar protection of brand reasons for the benefit of the consumer as I think were relevant in the Levi's v Tesco case where they (and others) were buying them for $30 over the counter in the USA, bringing them to Europe and selling them for as about as many pounds which was ten or so less than regular pricing. But because this was buying external to the common market it was not discriminatory in that way.

Now to look at what is said about Art 82.
purplewizard -

Thank you. I had included the preamble to the section in my comments and must have whacked it out. That's why I referred to picking and choosing elements. Things have to be kept in their proper context, and with cognizance of the purpose of the act.
hkwint Story submitter ·
Quoting:but that's true of ever single product sold in the open market. Big deal.


Yes, it is. Microsoft is different to 'ever single product sold in the open market', because it effectively creates a closed market by means of their monopoly and their dominant position. Furthermore, network effects play a role, which only goes for less then 5% of all products sold in any branche.

Quoting:I'm not sure of the current state of the "no-OS" clause.
Nobody except MS and the OEMs are. Therefore, it's time someone checks it.

Quoting:Huh? Since when did a finding of monopoly power in one market equate into a broad brush lack of freedom to do business?


Ask that to the Euro-Commission, Microsoft is already punished for half a billion Euro's for that.

And after all, I don't care that much about what somebody else tells me about the competition articles anymore, since they are no judges judging in this case anyway. If people laugh at me, so be it. At least I tried to do something about it, which is a lot more than most complainers can say.
>Ask that to the Euro-Commission, Microsoft is already punished for half a billion Euro's for that.

OK. So Microsoft has already been punished. What could possibly support your reasoning that they should be punished ad infinitum without any kind of hearing?
hkwint Story submitter ·
Compability isn't the main anti-trust issue. Pre-installed software, on the other hand, is, in my opinion.
>Pre-installed software, on the other hand, is, in my opinion.

That's fine, but raises the question:

Who has the monopoly?

Does Dell have a monopoly that would bar it from pre-installing software that makes its product attractive to more people?

Are European customers unable to get computers from other resellers without that pre-installed software?

What is the harm to consumers?
Dino, I agree. Trying to tell Dell what they may or may not preinstall is just as bad as telling a consumer what they may or may not buy.

I do not begrudge Microsoft's skill at negotiating sole-source OEM contracts any more than I "begrudge" anyone for having thought of something before I did.

Envy might be a better word, but even that is too strong.

What I really, REALLY want is for people to know they don't have to buy Microsoft with their new computer. That's why I like the refund efforts. So buy the Dell that is $53 less and has Windows, then get a refund. If enough people do that, Dell might realize they need to drop the price on their non-Windows machines.

Or not. Maybe F/OSS will be such a small portion of their sales that it won't be worth their effort. That is Dell's decision.

Meanwhile, I'll buy generic white-box and build my own with nary a pre-installed anything at all.

Quoting:So buy the Dell that is $53 less and has Windows, then get a refund


Well, that's exactly the goal. I'm not trying to tell Dell what to install or not, just make sure people are able to get a refund, and make that easier than it was in the past, when people had to phone to India several times to get their refund. The refund policy should be clearly visible on the site, and it should be easy to find.

OK, my legal points may suck, but if they help to reach the goal, to get a refund without much hassle, that's fine for me. Furthermore, I like to make use of the 'actions' at Dell, like an extra big harddisk and WiFi card for the same money. However, these actions are for Windows Vista only at the moment.

The demand to make the prices public, is just to be sure we aren't put away with less money than Windows costs.

It may have been not very clear from the article, but as the title says, the ultimate goal is to be able to get a refund for every lap/desktop one can imagine, without too much effort. That's not a big demand, is it?
> That's not a big demand, is it?

Corporations giving you back money??? Talk about delusional...
>That's not a big demand, is it?

No, it's not. Dell should make very clear what it's policy is if you don't want Windows. It's ok with me for them to say, "If you don't want Windows, you don't want Dell", but they should be clear.
Quoting:"If you don't want Windows, you don't want Dell"


I wish I could actually see an advertisement like this. It would be the best advertisement I have ever seen in my life.
I've started reading the case report for the most recent Microsoft v EU Commission and it makes me think there are still clear areas to complain for a similar case on. For example rather than Sun's complaint for the release of the protocols to interact with the dominant software how about

1/ demand that the full information on the device drivers be released because without them no other operating system can hope to compete and enter the market. Art. 82

2/ allege that the various bundling OEM deals that Microsoft asserts with PC makers is such as to stop machines with no or alternative operating systems being sold or advertised in competition with Windows. Art. 82

3/ that their dominance is such that they can offer the OS to the consumer as much higher than they sell to OEM forcing them to buy new machines to get it, a practice that is in agreement with the OEMs and therefore market distorting Art. 81

those are just a couple of examples thinking from a consumer point of view
"3/ that their dominance is such that they can offer the OS to the consumer as much higher than they sell to OEM forcing them to buy new machines to get it, a practice that is in agreement with the OEMs and therefore market distorting Art. 81" In the US, the automobile insurance business is very tightly regulated. Many states, such as where I live now, set the price at which insurance companies have to sell.

However, insurance companies are "allowed" to offer various discounts. Good driver, no tickets, experience, driver's education, etc. So there actually is competition due to these various discounts, a situation which the insurance regulations were supposed to prevent.

How would you discern the difference between these following two statements, enough so to prove that Microsoft was doing one and not the other?

"Microsoft sells our Premier products at prices designed to compete in the retail market. We consider the value for the price to be excellent. Our OEM channel, as in every other industry, is given preferential pricing based upon mutually agreed upon sales contracts which allow the OEM to compete within their own market."

or...

"Microsoft sells so much of our Premier products through the OEM channel that we have been able to stabilize our cost/profit margins through those channel sales. The retail price is based upon expectations we observe with consumers, and bolsters the apparent benefits of new purchases through OEMs while allowing high margins for the meager number of actual retail sales which ensures that point of sale stores will continue to carry the product."



After writing them, I have to ask, why is either one "wrong" to the point of being prosecutable?

Here's an excellent example of something that happened to me:

I was working retail in an office supplies store. I would walk by the software wall, because I would much rather have been assigned to the computers than the pens and glue. Oh well.

One day, I saw a man who was looking at the software, and I asked, "May I help you?"

"I was looking at XP, but what's the difference between "upgrade" and "full"?"

"If your computer already has Windows on it, you can use the upgrade version. Do you already have Windows?"

"No, I was given the computer and there is nothing on it."

"Then you can only buy the full version."

"But it's $100 more!"

"I understand. Unfortunately, the upgrade version will not install on a machine that doesn't already have Windows."

"But that's too much money."

"Here is RedHat Linux. It has everything that is in the Windows XP box ($200), the MS Office box ($300), and has no need of the Antivirus packages (~$50). $39.99."

I think he stopped breathing. He just looked at me. His face became red, his mouth opened once, then twice, then with great anger he reached up, grabbed the $200 WinXP full install box, and STORMED up to the cash register.

This is one reason why I have no pity for consumers "harmed" by Microsoft. Understanding, sure, sympathy, yes, but no pity.

Bob_Robertson

working vaguely backwards through your (some of?) points:

1/ the guy who turned red. My guess is he thought you were suggesting he couldn't afford $100. Additionally he perhaps didn't understand what you said and was too embarrassed to show his ignorance again. There could be a lot of reasons that don't relate to the actual products.

I have frustrations because amongst whole hosts of people I know, even ones who see me using Linux, the concept just doesn't get through to them. Interestingly it's the older ones (60+) who are most open because they (I think) aren't booked down with "if it's free (or Free) it can't be worth much" or mind set of only Windows exists won't touch the strange unknown because they are all unknown, the older ones just accept it as doing what they need and that is enough. The stubborn don't even seem to budge when I point out how much they are paying. Yet they won't pay the price for designer clothes and routinely rip off CDs. I can't really fathom it except to suggest that the Microsoft marketing monopoly has so captured minds that it is an example of a near unsurmountable barrier to competition in the market. Such a thin being another thing covered and considered by (EU at least) competition law.

I don't know where to start with you two examples because both are written from the phrasing of saying Microsoft sells so much of our when they don't sell anyone else's they sell their own product.

Why either one of them would be wrong is because of the law. The reasoning behind the law (EU at least) is that competition is good and benefits the consumer. Any deliberate action to distort the market and harm the consumer is wrong. Having such dominance that you can act in almost total disregard for the consumers and using it to that end is an abuse of your dominant position. And because under these conditions there is no (at least for the regular user who expects their computer to be more like a toaster than a toaster kit meaning they can just chuck in the bread and get toast without having to assemble and then calibrate the thermostats to get the proper level of toasting) alternative, especially no alternative available to just buy in the near by PC World there is no competition. So if they push up their prices too much people just don't by a PC.

As for the preferential pricing to OEMs and they compete in their markets. That is fine except it doesn't happen in the real world like that alone does it. The pricing and ties include things like you won't put other icons or media players on the desktop, if you sell any machines with no OS on we won't continue to let you have our product or the price will go up. And it is using this leverage to distort the market that is considered illegal.

Where it is distinct from the insurance market is in fact the regulation. If every consumer OS was like an insurance policy and had to interact in the insurance and legal framework the common requirements and minimum functions would be defined by government and have to be compatible. As it is there is only one insurance company here and it says this is all we'll cover you for and clause 99x.01 says if take out insurance with any other party you invalidate this cover (or something like that).

In a short final commet I suppose the reason the abuses are wrong is the law recognising the idea that the corporate world is there in actual fact for the benefit of the consumer and not the consumer being there to be farmed (fleeced) for profit to keep the minority of shareholders in ever greater standards of luxury.

Ah, ok. I understand. You equate being "against the law" with being "wrong".

From that standpoint, I do indeed understand what you mean.

My differences with your position begin with my _not_ believing that something is "wrong" because it is "against the law".

The man became furious because, I think, he wanted me to tell him how to get around the "upgrade" issue with Windows.

When I didn't, he became angry, but he could not accuse me of any harm to him because of not "helping him break the rules". His anger was, I believe, at Microsoft for requiring him to spend an extra $100 for what he considered nothing.

Sadly, Microsoft used no force. In the end he had no one to blame but himself.
Bob_R: I agree with your point that law != right/wrong. In eons past, that might have been more accurate, but today it is simply a ToS for citizenship in a given geographical region. Right and wrong are rarely associated with the law.
Bob

I disagree that your angry person wasn't the victim of force by Microsoft. Just because they don't beat him or threaten to with a baseball bat doesn't mean his position is not the result of Microsoft's actions. And surely we can all recognise that to each action there is a reaction. So if M$ actions were and are intended to bring about and maintain an illegal (and I would also consider wrongful) monopoly he was forced to do that if he wanted to achieve his aims.

I'll be slightly broader and say he was forced not through there being no alternative but there being no realistic alternative for him. Which is the case as applies to the masses (as individuals).

I chuck that as individuals on because it would take a mass movement to make any difference versus a monopoly as powerful as the Microsoft.
Some people by Kleenex brand, sitting on a shelf right next to a generic tissue with no difference other than price.

Yet, people buy the more expensive "brand name".

Shall Kleenex, or any other "brand name" producer, be prosecuted for the fact that people choose to buy their more expensive product?

Shall a sales outlet be prosecuted because they offer only one "brand name" of a product? Or, because the Kleenex company gives such a sales outlet special pricing to only carry Kleenex products, are they prosecutable for "monopoly" practices?

Microsoft is not powerful, they merely have market share. When Microsoft acquires the power to compel someone to buy their product, then we can talk about power.

Kleenex do not have in affect absolute power over the tissue market. The comparison is meaningless.

If the specific outlet carries only one product and in agreement with all other outlets in an area (in elimination of competition and therefore considered harm to the consumer through elimination of choice in the geographic area) then yes they should be prosecuted.

As for the power of Microsoft to compel the purchase of their product. I can't tell if you are being awkward for the hell of it now or just stupid (for the hell of it) because I think plenty has been laid out to show (here we go one more time) that at least indirectly the monopolistic power used to control and maintain the market does in affect result in many people (at least wanting to do any work with computers) being compelled to buy from them.

Or as I think I at least half commented on elsewhere do you require large men paid by Microsoft to be standing in stores beating the living daylights out of people who dare ask for something they don't profit from. What do you define as compel?
"he was forced not through there being no alternative but there being no realistic alternative for him."

No, I showed him an alternative. He _chose_ not to use it.

Shall I prosecute the Catholic church because, being a Muslim, I think think they are "forcing" their adherents to do things that are getting them sent to hell?

No matter how wrong I think his choice was, it was his choice. The only thing I could have done to prevent his buying Windows would be to use force myself against him.

"Kleenex do not have in affect absolute power over the tissue market."

And neither does Microsoft. We wouldn't be having this discussion if they did.

"What do you define as compel?"

Force and fraud. Coercion. I looked it up.

Go get a bunch of guys together, choose up teams, and charge a nickel a head to people to come and see you play baseball.

Oh, that's right, that's _illegal_, because Major League Baseball has a _MONOPOLY_ on baseball. It means that if you try to do something like "arena baseball", "eXtreme baseball", "Canadian League baseball", whatever, they can put you in jail. (my examples are deliberate to point out that Major League Football has no such monopoly)

What Microsoft has a "monopoly" on is the sale of _Microsoft_ products. They cannot prevent you from using, selling, buying or writing, anything else. Even if what you buy/sell/use/write directly and specifically competes with Microsoft products, they cannot do _anything_ about it. So long as it's not a Microsoft product, they cannot compel you to do anything. They are not the IRS, they cannot compel you to pay for something you don't use.

They cannot compel anyone, by any definition of the word compel. They cannot prevent competition, they cannot punish you. ..._Yet_. But their lobbyists in Washington and elsewhere are doing their best to _gain_ that power, and don't look to government to solve a problems that are specifically created by government.

I agree that their OEM channel is a bunch of whipped currs, and that some people demonstrate an addiction to Microsoft products that I have only otherwise seen with people's addictions to government and religion.

But just as I am not going to prosecute Billy Graham for having a "monopoly" on his books, because he cannot compel me to read them or listen to or attend his shows, neither am I going to prosecute Microsoft and Gates for a _fantastic_ job of marketing and sales.

To do so would be to give in to jealousy and envy. That is all I see in the persecution of Microsoft.

The only thing Microsoft has done for which they sorely deserve a nasty whipping is their actions about refunds. Deliberate, systematic fraud on their part to make refunds virtually impossible for people to get.

I'm not being awkward or evasive. What I am doing is using the word "compel" correctly.

co·erce Pronunciation: kō-ˈərs Function: transitive verb Inflected Form(s): co·erced; co·erc·ing Etymology: Middle English cohercen, from Anglo-French *cohercer Latin coercēre, from co- + arcēre to shut up, enclose Date: 15th century 1 : to restrain or dominate by force 2 : to compel to an act or choice 3 : to achieve by force or threat synonyms see force

MS doesn't force, it coerces

33 earlier comments in the full thread.

There's a difference between you as the individual and consumers as a group in general.
False "A monopoly means they can prevent competition." - a monopoly can exist it doesn't have to be abused, it doesn't have to be able to be used abusively it can just exist. Speech exists I don't have to speak or even be able to speak I just can.

I don't recall ever having said if something is wrong it is illegal or that if it is illegal it is wrong. Even using a dominant position doesn't have to be wrong, we put the police in a dominant position and generally (at least in my country) the use of their powers doesn't constitute a wrong. However I think multiple court cases lost by Microsoft have enough evidence to show that they have both abused their monopoly and dominant market position (I accept liberal use of monopoly in loose substitution of dominant market position was too loose).

On the refunds I think it was asserted earlier that a contract between parties should be able to contain what ever between them they wish. On two examples, first the XP EULA says return it to your seller for a full refund. It doesn't actually represent an agreement with the seller with the buyer that they will. I think there are cases in some countries that made court that perhaps I should look over. Second the Vista license says in addition if the retailer won't pay ask us (Microsoft) and refers to its nation by nation guides on it. It again makes no commitment to refund, just suggests it might depending on regional policy. Which in the UK would really only leave you with the statutory protection which entitles you to exchange in the event for defects or not being fit for purpose. There is no right to return something you buy just because you don't want it.

So on the angle of Microsoft aren't doing anything wrong in leveraging their market dominance nor are they in not honoring refunds, because they don't have any obligation to do so, there is nothing to honour.
> There is no right to return something you buy just because you don't want it.

I should point out that I have read (in print, no link, a long time ago - take it for what it's worth) the story of why the refund clause exists.

Microsoft inserted the refund clause not to be nice to customers, but rather to protect themselves. When you buy a computer at a retail outlet, you do not agree to the EULA before making a purchase. You cannot sell something, then the next day call up the customer and say, "Oh by the way, here are the restrictions on the product you purchased". Under the current system, you enter into an agreement with Microsoft when you use the computer the first time, and Microsoft is saying "you can opt out without a penalty". Otherwise the consumer is under no obligation to follow a list of restrictions that they did not agree to when making the purchase. They could not, for instance, simply say "You can choose not to use the software if you don't like these rules" because they have already purchased Windows. To avoid any potential problems, they included the clause, knowing full well that very few individuals would take advantage of it.

If that is the case (again, I have no idea of its accuracy and little interest in pursuing it further), then they do have to provide the option of a refund.
"If that is the case, then they do have to provide the option of a refund."

It is the case. They are asking me to agree to a contract with them, after which I can use their product.

Since they do not have a monopoly, they cannot force you to pay for something you do not want and will not use.

Microsoft could also have gotten around this, I think, by not charging for Windows. I cannot go to AOL and say, "I do not want your product, give me a refund", because they did not charge me for the AOL software that came preinstalled.

The "I didn't sign anything when I bought it" is also one of the sticking points for "shrink wrap licenses". Since I've signed nothing, and yet bought the product, I cannot be held to the supposed restrictions placed upon the product by simply opening the package. That is why Microsoft includes "Read this, and specifically state below that you agree to this EULA". Without it, the EULA would not be binding.

But a contract cannot be binding to only one of the parties involved (unless you're government). *IF* Microsoft specifically says I may say "no" _after_ purchase, then Microsoft has created the situation requiring a refund if I indeed do say "no", just as I would not be charged for the software if, at purchase time, I had declined to sign the EULA.

The point from reading the license(s) I was making is they (Microsoft) make no actual promise to refund you anything in either license I looked at. You would have to imply that is what they mean.

And why bother with the clause when it's always been possible to get or at least build machines with no operating system installed? They can surely just argue "you didn't have to buy one with Windows on".
Quoting:They can surely just argue "you didn't have to buy one with Windows on".


They can't. In the store you can choose to buy Windows, go home, read the EULA and decide that you don't agree to it after all. The EULA isn't on the outside of the box so you cannot decide that before you buy it and try to install it.
"they (Microsoft) make no actual promise to refund you anything in either license I looked at."

Really? Let's see...

http://www.microsoft.com/about/legal/useterms/

Selected Vista, Home Basic:

Page 1 paragraph 3, in bold print:

"By using this software, you accept these terms. If you do not accept them, do not use the software. Instead, return it to the retailer for a refund or credit."

Bold print ends. Paragraph then goes on,

"If you cannot obtain a refund there, contact Microsoft or the Microsoft affiliate serving your country for information about Microsoft's refund policies."

...and includes web site URLs and an 800 number.

I'm sorry, PurpleWizard, how much more blatant do they have to be? The refund is in _their_ contract.

IIRC not all EULA's are the same. Specifically, only the OEM EULA's come with the refund clause, not the retail versions. I don't know how this affects small shops without OEM licenses that install retail versions on their whiteboxes before selling them.
> not the retail versions.

Most retail stores have a returns policy which will allow you to return an unused item for a full refund. There's usually a time limit (often 30 days), and the need for a receipt.

Most small shops can simply reuse your copy on another machine, so they should be willing to take it back as long as it hasn't been activated.
hkwint Story submitter ·
Bob:

The license you point too are retail-licenses*, a minority of the licenses they sell, and the retail-clauses are not for OEM customers. The OEM's are responsible if customers want to return Windows OEM, and it's unsure if you can get a refund for Windows OEM products. Obviously, the paragraph you quoted wasn't made by Microsoft because they wanted to do so, but because they felt they were forced to do so. If that paragraph is in the Vista license, it should be in all their licenses. Also, it's not really sure what the refund means; it could also mean, return the whole desktop including Windows, and go home with a refund for the desktop _and_ Windows, but without a desktop. Also, HP (I believe) sent me a letter in which they stated they weren't legally obliged to offer a refund for the software only. Another OEM replied it is possible, but will cost you more than the refund you receive.

What I actually want to see, is a page at every OEM's website telling you how the refund is possible, how it works, and how much money you will receive. Until then, most people don't have a choice, since they don't know they have a choice. The example above (is a refund for the software + desktop or for the software only?) and the discussions we have about it asking if and what the OEM's are legally obliged to refund or not, shows the OEM's need a clear statement + explanation about this issue at their websites, understandable for non-EULA-experts (because we, the customers, don't fully understand the matter at this time, so it's to the sellers to inform us).

*Retail licenses: If you buy Windows software without hardware. They usually are about two-three times as expensive as the OEM licenses, and therefore, aren't popular at all. Almost nobody uses those, and even small around-the-corner shops sell OEM licenses, when they really (legally) _should_ sell Retail-licenses, because nobody wants to pay that amount of money for Windows software.
hk, really? Where did it say that?

Bob "If you cannot obtain a refund there" Implies they are not obliged to refund they just might. There is no enforceable commitment from the license, that commitment can only come from your contract with the retailer and if they don't include those terms in your contract of purchase it would look to me like you are without obliged refund.

Also " for information about Microsoft's refund policies." Doesn't actually commit to you being able to get a refund it just says there is information that might offer it.

And yes that is the phrasing in the Vista retail license, the older product retail licenses I looked at didn't include the additional part saying contact Microsoft if you can't get a refund off the retailer. And my interpretation seems to fit with the experience HK reports in letters from OEMs.

And even then it would be open for the OEM to value the Windows portion at zero hence even when it came to a refund they put a zero price on it.
"And my interpretation seems to fit with the experience HK reports in letters from OEMs."

Which is why I have repeatedly asserted that a class-action suit, with punitive damages, is long overdue.

You're really trying so very hard not to say, "Ooops, it does say refund. My bad."
hkwint Story submitter ·
Quoting:You're really trying so very hard not to say, "Ooops, it does say refund. My bad."


I understand your reaction. Maybe, I should try to make the story a bit clearer. It is really important to distinguish between Retail-Windows licenses and OEM-licenses. Retail-Windows _isn't_ pre-installed Windows, it's the one you install yourself. Off course, you can return it, because you buy it separately; that's the specific thing about the retail version.

The OEM license also says refund. That's what I knew and wrote on January first, 2006: http://lxer.com/module/newswire/view/49036/index.html

But, though it says refund, out of nine, five big international OEM's didn't reply to my question (most of them none reply at all!) what the refund policy was at all, and two told me (written!) they are not obliged to give me a refund! One kindly explained a refund was possible, but the costs the customer pays to get the refund were bigger than the refund (this just isn't acceptable to me). The other one didn't say so directly, but it was between the lines (I should say scheme, in that particular case). It can say refund more than a billion times all over Redmond on every billboard, building and dustbin, but as long as there's no policy at the OEM's, there's no refund neither, and as long as OEM's aren't able to answer my mail by recorded delivery asking where I can find their policy, I assume they don't have one. Therefore, it's doesn't mean _anything_ at all that it says refund (in the OEM license). Do you believe Microsoft when they say their shared source initiative is about open software? Do you believe them when they say they care about interoperability and therefore opened port25 and made an OOXML/ODF conversion tool? Do you believe Bill Gates when he says he is filantropic? Well, that's written (though not in licenses) too, and I don't believe any of this without research (on my own). You know about Samba and interoperability. You probably know how Bill Gates invests in companies that polute Africa, and sell anti-AIDS drugs for prices those people can't afford. You probably have you ideas about how Microsoft wants to stop ODF, even though they made a conversion tool. Believing something they write on their website, or even if it's in the (Vista Retail only!) license, doesn't mean that much.

It's all about the refunds from the OEM's. Go to Dells, Toshiba's, Lenovo's, HP's, Sony's or NEC's site (Include Medion and Targa if you live in the EU). Where does it say: Refund possible, contact this 800 number, visit this website, here's what to do? Where does it mention a refund at all? Last time I searched all those sites, it didn't. I'd really like to hear from you again when you found it, but at the moment, I think it just isn't there, since the OEM's mentioned just doesn't want to give their customers refunds for software they don't want and don't use, and neither they feel obliged to do so by law. Of course, I could refuse to buy their laptops. I could buy a laptop from one of the suppliers in our Linux-vendors database. However, those laptops are far more expensive, even without Windows. I just want to be able to buy a cheap laptop, like the special offers at Dell's and HP's site; without Windows. I want to be able to buy those incredible Medion laptop at the Aldi (which was really cheap by the way, and sold out nation-wide within about five minutes after the stores opened, as I heard), also without Windows. That's what we are talking about. Not about what Microsoft says, because frankly, I don't care. Almost nobody buys retail Windows for more than 300 dollars. So, that's what I'm working for. I hope it is a bit more clear now, and if not, I'll be glad to explain it again in a different way, so feel free to comment.
"more than 8 OEM's didn't reply to my question what the refund policy was."

I couldn't agree more. I hope I'm on the jury that hears the case, I would slap them absolutely silly for such a careful, systematic ripoff of customers.
hkwint Story submitter ·
Ah, I'm sorry, changed my reaction after you reacted I assume. The numbers of OEM's were a bit different, updated them.
No Bob I'm not "really trying so very hard not to say" blah, there is no need for me to say such because your simply wrong.

The license conveys no clear right to obtain a refund be it OEM or retail. Most retailers probably will refund an unopened product. Nothing in the EULA requires it.
Purple,

"By using this software, you accept these terms. If you do not accept them, do not use the software. Instead, return it to the retailer for a refund or credit."

How is this "no clear right to obtain a refund"?

How is this "Nothing in the EULA"? It is quoted DIRECTLY from the EULA.

> It is quoted DIRECTLY from the EULA.

All well and good, but what in there says that you are entitle to a refund for the software alone? A refund for the entire computer is a perfectly reasonable way to satisfy your request.

The fact that some people have managed to get token refunds is nice, but not required.
I've written: "I don't equate wrong with illegal".

Fraud is both wrong _and_ prosecutable. To write that in the _SOFTWARE_ EULA and not give the refund is grounds for being staked out on top of an ant hill and smothered in honey.

Because I like to collect references, here are a few

France is already taking action:

French consumer group attacks PC software bundling

,----[ Quote ] | UFC-Que Choisir legal officer Sandra Wouhling said current | practice effectively forced ordinary consumers to buy computers | using Microsoft operating systems whereas companies anda | dministrations were offered a real choice. `----

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn... http://tinyurl.com/yf7kfu

French consumer protectionists are demanding PCs without preinstalled software

,----[ Quote ] | The consumer protectionists of the French organization UFC-Que Choisir | are demanding of the IT group Hewlett-Packard and the vendors Auchan | and Darty that they offer PCs without preinstalled software. | | [...] | | UFC-Que Choisir last year also took action against Sony and Apple, | taking the two companies to court for allegedly putting their | customers at a disadvantage through proprietary DRM technologies | and curtailing their choice of devices. `----

http://www.heise.de/english/newsticker/news/82605/from/rss09

Here is some further proof, as if any more is needed, that Microsoft's tactics are all too deliberate.

Microsoft Shuts Down Linux 10 Years Ago Says Iowa Attorne

,----[ Quote ] | Going back now to as early as 1998, Microsoft starts to realize that | Linux might pose a possible threat, and Vinod Valloppillil, who is | a program manager at Microsoft, is asked by Mr. Allchin, Jim Allchin, | to analyze potential strategies for combatting open-source software, | and specifically Linux. | His memos are leaked to the press in April -- I beg your pardon -- | in October of 1998 and become known as the Halloween documents. | And the evidence will be that Microsoft uses its influence in the | OEM channel, the computer manufacture channel, to make sure that | end users have a difficult time buying PCs with Linux preinstalled. `----

http://www.linuxelectrons.com/News/RoundUp/Microsoft_Shuts_D...

Microsoft's Dirty OEM-Secret

,----[ Quote ] | They are, in short the secret to Microsoft's success. And the word | secret is to be taken quite literally: No OEM may talk about the | contents of his contract, or he will lose his license, and (assumption) | likely be sued for breach of contract as well. `----

http://www.kuro5hin.org/story/2001/10/23/13219/110

Jury Hears Microsoft Competition Suit

,----[ Quote ] | A judge on Friday told jurors they must accept as fact that a | federal court found in 1999 that Microsoft holds a monopoly over | computer operating systems and that it restricted computer | manufacturers' ability to use competing systems. | | [...] | | She said she'll show that the company used its monopoly power | to exclude competition and control prices and that it conspired with | other companies to restrain trade, maintaining what she called a | chokehold on software competitors and computer manufacturers. `----

http://biz.yahoo.com/ap/061201/microsoft_trial.html?.v=1

Lastly, here is where Dell fits in:

Did Microsoft want to 'whack' Dell over its Linux dealings? [url=http://news.com.com/Did Microsoft want to whack Dell over its Linux dealings/2100-1014_3-6153904.html]http://news.com.com/Did Microsoft want to whack Dell over it...[/url]

Dell's secret Linux fling [sabotaged by Microsoft] http://www.theregister.co.uk/2007/01/09/dell_linux_china/

Microsoft 'killed Dell Linux' - States http://www.theregister.co.uk/2002/03/19/microsoft_killed_del...

maffia-practice : dope them while they are young

PC World refuses Windows refund

Quoting:But while outfits such as Dell are giving punters their money back, apparently PC World is telling punters to go forth and multiply, in a nice way of course. A letter back from the outfit says that the operating system comes as part of the package pre-loaded onto the machine and therefore no refund.
http://uk.theinquirer.net/?article=38577

Man wins damages from Acer over M$ refund

Quoting:OFFERED ONLY €30 from Acer for a refund on Microsoft products bundled with his notebook, a man took the company to court.

According to this web site, not only did Antoine Gutzwiller get a full refund on a list of the software bundled his machine, but got €500 extra for what the court dubbed Abusive Resistance.

Initially, Acer had offered only €30 if the man returned elements of the install at his own expense. µ
http://www.theinquirer.net/?article=42546 http://perso.libre-zone.net/article-125-proc-dure-r-ussie-nu...
I just posted the article to the newswire..Thanks henke54.

Italian class-action lawsuit for pre-installed M$ software..

Quoting: The Aduc consumer defence association said on Tuesday it would present its case at a court in Florence after Wednesday's Epiphany holiday.

The move against Microsoft, the world's biggest software company, comes after a law took effect on Friday allowing consumer associations to file suit for groups of consumers.

"Individual cases affect a limited number of users," Aduc Chairman Vincenzo Donvito told Reuters.

"Therefore, as there is a large number of users involved, and with the importance of the free market issue, we have decided to take a collective legal action against Microsoft."

Italian law provides for compensation for costs and not punitive damages. Microsoft was not available to comment.
http://www.reuters.com/article/technologyNews/idUSTRE6043HZ2...
Quoting:Around 2,000 people, most of them Linux users, have already expressed interest in participating in the lawsuit, Donvito said in a telephone interview.
http://www.computerworld.com/s/article/9143102/Italian_consu...
And with a name like "Don Vito" among the suit's supporters...

Will he make Microsoft an offer they can't refuse?
One can only hope.
hkwint Story submitter ·
OK, that's great. I tried to contact Aduc before (few month's ago), but to no avail. Their website is in Italian only, and sow is their newsletter I received by e-mail every month.

I also noted Aduc filed a formal complaint at the DG of Competition in Bruxelles (the ones who fined MS for $1 billion). Sadly the complaint was in Italian only, but with the help of Google translate I was quite able to understand their reasoning. These people are serious. I'm really surprised they start a case, because as I understood they don't receive any funding from state or whatever, from volunteers only.

I really hope April (a French organization) will join. Maybe Dutch Consumer Federation too. Note to myself: Inform them 'bout Italy. They have been on this before - but Dutch Competition Authority wouldn't do anything. Those are a monopoly themselves, without some democratic control (yeah, parts of the government being / acting 'independent', a real PITA). But the language - as noted - is a problem. I contacted some nice people of April before and they were happy to help filing an official complaint at the DG, but they apologized for not being that good at English, and I apologized for not being good at French. And I guess neither of us speak Italian, while the Italian people didn't react to my inquiries. All volunteers with a busy live. As a result I stopped my effort, but I'm really glad they didn't.

However, here's the problem:

Microsoft is not the one tying sales. They're not tying a PC to the sale of Windows.

Dell, HP, Acer and the likes are the ones tying the salesy. They're tying the sale of Windows to the sale of a PC. None of those OEM's have a market share of more than 40%, so none of them can abuse their economic power according to Art. 82 and 83 of the treaty of Europe.

But sure hope this action by Aduc will change something.
hkwint Story submitter ·
It's all here (using whacky 'ol Google translation:)

http://translate.google.com/translate?js=y&prev=_t&hl=en&ie=...
Quoting:I'm really surprised they start a case, because as I understood they don't receive any funding from state or whatever


They probably get paid by comsumer memberships, just like the Dutch Consumentenbond is. The reason Aduc is filing suit now is because Italian law changed. In the past, consumer organisations could not file a class-action lawsuit on behalf of consumers. Now they can.

Post a comment

A free account is needed to post. Write your comment here first: your text is kept in this browser while you sign up or log in, and is waiting for you when you come back.

Your message:
|||||
10
Markdown: **bold**, *italic*, [text](https://link), - lists, > quotes, $x^2$ for math. Formatting help

Sign up and post (it is free)  or  Log in and post