A federal class action claims Microsoft used its market power to force consumers to buy computers with a pre-installed, clunky and defective Windows Vista operating system, forcing them to spend more money to "downgrade" to the more reliable Windows XP. The class claims Microsoft extended its $104 "downgrade" offer twice, to reap "tremendous profits" from it.
"Microsoft prohibited its OEMs [Original Equipment Manufacturers] Dell/HP/Sony etc. from selling new computers with Windows XP operating systems pre-installed," the class claims. They say Microsoft made it impossible for consumers to buy new computers with Windows XP, but charged $104 extra to downgrade from Vista to XP. Microsoft extended its $104 downgrade offer twice, most recently until July 31, 2009, to reap "tremendous profits" from the combination of clunky new system and relatively better old one, the complaint states. It claims that nearly 1 in 3 people who buy a computer with Vista downgrade to XP.
The Windows Vista operating system, released on Jan. 31, 2007, was not well received.
Plaintiffs claim Microsoft controls 90% of the "relevant market," and announced on July 18, 2007, that it had sold more than 180 Vista licenses - totting up gross sales of $30 billion to $60 billion from it. "However, these figures are believed to include Vista licenses that are downgraded to Windows XP."
The complaint claims Microsoft "willfully acquired monopoly power and have maintained such monopoly control over the relevant market by suppressing competition in the Intel-compatible PC operating systems software market through restrictive and exclusionary conduct. Defendants suppressed competition with the specific intent of acquiring and obtaining such monopoly power."
They claim Microsoft fixed prices for Windows XP at "supra-competitive levels" and forced consumers to downgrade to it due to the clunky Vista program.
They claim, "Microsoft prohibited its OEMs [Original Equipment Manufacturers] Dell/HP/Sony etc. from selling new computers with Windows XP operating systems pre-installed."
The class demands treble damages for unfair business practices and state antitrust violations. Plaintiffs are represented by Beth Terrell with Terrell Marshall & Daudi.