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Vista-downgrade lawsuit revised; Microsoft now accused of price-gouging

It focuses on rules forcing users to buy priciest Vista editions before downgrading

March 6, 2009 12:00 PM ET

Computerworld - The California woman suing Microsoft Corp. over Windows Vista's downgrade rights revised her lawsuit yesterday to focus her charges on the requirement that users buy the most expensive versions of Vista if they want to replace that operating system with Windows XP.

Originally filed Feb. 11 in a Seattle federal court by Los Angeles resident Emma Alvarado, the lawsuit was re-submitted Thursday. In the amended complaint, Alvarado repeated her charges that Microsoft violated Washington state's unfair business practices and consumer protection laws by restricting computer makers' ability to offer XP on new PCs after Vista's early 2007 launch.

"Downgrade" describes the Windows licensing rights that allow users in some circumstances to replace newer versions of Windows with an older edition without having to pay for another license. In effect, the license for the newer Windows is transferred to the older edition.

The revised lawsuit spells out in much greater detail how Microsoft allegedly profits from its Vista downgrade practices. In particular, the complaint now highlights the rules that limit downgrades to Windows XP Professional, and then, only from PCs that have Vista Business or Vista Ultimate pre-installed.

"Although many consumers would prefer to purchase a new PC pre-installed with the Windows XP operating system or at least not pre-installed with the Vista operating system, Microsoft has used its market power to take advantage of consumer demand for the Windows XP operating system by requiring consumers to purchase a PC that includes a license for the use of the Vista operating system and to pay money (as part of the overall purchase price of the PC) to downgrade to the Windows XP Professional operating system," the suit stated.

"To make matters worse, Microsoft requires consumers to purchase a PC that includes a license to either Vista Business or Vista Ultimate -- versions of the Vista operating system that: (a) are premium, more expensive versions of the home versions of the Vista operating system, and (b) include specialized applications that are neither needed nor wanted by an ordinary consumer seeking to purchase a PC primarily for personal, non-business use," the filing continued.

The suit also noted that Windows XP Professional, the only version of that line that users are allowed to downgrade to, is a premium edition with a higher price tag.

Alvarado claimed that Microsoft dreamed up those rules to boost Vista sales figures and profits.

"Microsoft appears to have conceived and implemented the 'right' for consumers to 'downgrade' to the Windows XP Professional operating system in order to: (a) maintain and/or inflate its sales figures for the Vista operating systems (particularly the Vista Business and Vista Ultimate versions ... and (b) recoup its substantial investment in the development and production of the Vista operating system by forcing consumers to purchase the premium, more expensive versions of the Vista operating system (Vista Business or Vista Ultimate) in order to 'downgrade' to the Windows XP operating system," the lawsuit read.



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