Microsoft battles class-action over WGA antipiracy technology

At risk, 'hundreds of millions of dollars' if millions of Windows XP users join case

Microsoft is slamming a lawsuit that claims it misled millions of Windows XP users about that company's anti-piracy software, calling the lawsuit "fictional," "demonstrably false" and from an "alternate universe."

The company said last week that it also opposes a move to grant the case class-action status, court documents show.

The three-year-old lawsuit accuses Microsoft of duping consumers by labeling its Windows Genuine Advantage (WGA) software a critical security update, and failing to tell them that WGA collected information from their PCs and frequently "phoned home" that data to its servers.

In June 2006, Microsoft began pushing WGA to Windows XP users via Windows Update, the company's default update service, as a "high priority" update that was automatically downloaded and installed to most machines. Shortly after that, Microsoft acknowledged that WGA transmitted information whenever a user logged on to Windows XP. Under pressure from an intense user backlash, it later reduced the frequency of the piracy checks.

Microsoft relies on WGA to detect bootlegged copies of Windows; if the software sniffs out a counterfeit, WGA posts constant nagging messages on the screen.

In documents filed with a Seattle federal court on Sept. 22, Microsoft asked that a request for class-action status -- a move that would open the case to millions of Americans, and open up Microsoft to significant damages if it loses -- be denied.

"Ignoring the evidence, Plaintiffs tell an outrageously fictional tale of how Microsoft supposedly 'forced' WGA Validation onto more than 350 million Windows XP computers," Microsoft said in the opposition brief submitted to U.S. District Court Judge Richard Jones. "Without any evidence, Plaintiffs assert that Microsoft achieved this distribution by threatening to withhold critical security updates and breaking into computers without their owners' consent."

Company lawyers also claimed that the plaintiffs had constructed an "alternate universe" that had no connection to the facts. "The fictional thesis on which Plaintiffs base their motion is demonstrably false," Microsoft attorneys argued.

Specifically, Microsoft denied that it had ever withheld patches from users running counterfeit Windows XP. "Despite Plaintiffs' assertions to the contrary, Microsoft never withheld any critical updates or security updates designed to improve the existing functionality of Windows XP, regardless of whether a user's copy of Windows XP was genuine," the company countered.

A class-action for the case is unfeasible, Microsoft said, because it would require inspecting "tens of millions of individual computers," an impossible task. "Each inspection would require a skilled computer technician and cost hundreds of dollars more than the $5 Plaintiffs seek for each proposed class member," said Microsoft.

If class-action status is granted, Microsoft could face serious damages, its lawyers acknowledged as they cast the plaintiffs as gold diggers. "Plaintiffs seek hundreds of millions of dollars on behalf of tens of millions of persons for twelve forms of alleged damages," said Microsoft.

This case has had a relatively low profile in the press. Nearly a year ago, however, Computerworld reported that Jones had granted Microsoft's request to keep secret sections of the WGA software development kit (SDK). Making those details public, Microsoft argued, would give hackers inside information on how to break, or crack, WGA.

Microsoft's WGA, however, has often made news. In August 2007, a day-long server outage riled thousands of users who were mistakenly fingered for running counterfeit copies of Windows. More recently, Microsoft confirmed that it will not allow users with pirated Windows to install its free Security Essentials software.

According to the court docket, the case, which currently involves nine plaintiffs, including two companies, is set to go to trial Jan. 25, 2010.

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