Russia launches antitrust case against Microsoft over XP

Claims Microsoft abandoned older OS to force users to buy Vista

Russian antitrust regulators are investigating Microsoft's retirement of Windows XP and could file formal charges as early as next month, according to a government statement on Thursday.

The Federal Antimonopoly Service (FAS) accused Microsoft of abusing its dominant position in the operating system market by pulling Windows XP from retail in June 2008, thus forcing users to buy Vista -- even though demand for the former remained high.

"Analysis of various operating systems show that the transition to the new operating system Windows Vista comes with the continued demand for the previous operating system, Windows XP," said FAS in a Thursday statement (as translated by Google Translate). "Demand of Windows XP is also confirmed by retailers and the number of orders in the field of public procurement."

FAS also charged Microsoft with violating Russian antitrust laws by setting different prices for the same product, a possible reference to the practice where Microsoft lets computer makers factory-downgrade PCs to XP Professional from either Vista Business or Vista Ultimate, the two highest-priced retail editions of that 2007 operating system.

"The case against Microsoft Corp. will be considered July 24, 2009," said FAS.

Microsoft did put an end to retail sales of Windows XP Home and Professional last June, although the former remains available to netbook makers and the latter can be installed as a downgrade from Vista. Microsoft has said it will stop shipping downgrade XP media to OEMs at the end of July, but there have been signs the aging operating system will live on; reports have claimed that a free or discounted upgrade to Windows 7 will be offered to customers who purchase a downgraded-to-XP PC between June 26, 2009, and Jan. 31, 2010.

Microsoft said it has not seen the formal complaint. "Microsoft has not yet received notice of any new investigation," said company spokesman Jack Evans in an e-mail Friday. "However, we will cooperate with any inquiry and remain committed to full compliance with Russian law."

Parts of the FAS explanation for its investigation resemble a lawsuit filed in U.S. federal court by a California woman last February. At the time, Emma Alvarado accused Microsoft of breaking consumer protection laws by barring computer makers from continuing to offer XP on new PCs after Vista's early-2007 launch. Alvarado's case, which is seeking class-action status, is on hold while the courts consider Microsoft's request that it be rolled into other antitrust issues that go as far back as 1998.

Microsoft is also facing antirust action in the European Union, which filed charges against the company in January over its bundling of Internet Explorer (IE) with Windows. The EU's antitrust agency is expected to order Microsoft to change Windows so that it offers users a "ballot screen" where they can choose from a number of browsers, including IE and rivals such as Mozilla's Firefox and Opera Software's Opera.

Late last month, Microsoft canceled a hearing on the charges, saying that senior regulators wouldn't attend because of a scheduling conflict with a major antitrust and competition conference. The hearing was slated to take place this week, starting Wednesday and ending today.

Copyright © 2009 IDG Communications, Inc.

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