Opposition to new MS license costs spreads to UK

U.K. trade group The Infrastructure Forum (TIF) confirmed Monday that it has requested that the U.K. government's Office of Fair Trading (OFT) launch an investigation into the software pricing policy for Microsoft's upcoming Windows XP operating system.

TIF sent a letter on Friday to Secretary of State for Trade and Industry Patricia Hewitt requesting the investigation, a TIF spokeswoman confirmed. TIF is a membership organization comprising IT managers from companies including British Airways PLC, British Broadcasting Co. (BBC), Lloyds TSB Group PLC and GlaxoSmithKline PLC.

The Department of Trade and Industry declined to comment.

Microsoft plans to launch Windows XP on Oct. 25 but has already weathered heavy criticism for its new licensing program, which organizations such as TIF contend will increase their licensing costs by an average of 94 percent.

Microsoft is touting its new licensing program as simply an attempt to reduce the unlawful copying of its product. When Windows XP is activated on a user's PC, it "locks" that copy of the software to the hardware configuration of the computer and issues a 25-digit activation number, which Microsoft then stores in a database.

Once the user activates the number by registering it over the telephone, Microsoft can identify when a piece of software is installed on two different PCs. That number must be activated within 30 days or else the product no longer works.

In response to some of the criticism, on Friday Microsoft Corp. increased its discounts to customers who want to install the software on more than one home computer. Discounts for the new Additional Family License program, went from between US$8 to $12 to between $10 to $30 on additional licenses.

For corporations, Microsoft in July extended by five months -- from Oct. 1 to Feb. 28, 2002 -- its deadline for enrollment in the licensing program so as to give enterprises additional time to figure in the cost of the program into upcoming yearly budget cycles. All corporations have to upgrade their licensing agreements with Microsoft regardless of whether they are moving to Windows XP or not.

In Europe, Microsoft is already facing an antitrust investigation by the European Commission (EC).

Last month, the EC confirmed that it had merged its two antitrust investigations into Microsoft's operating systems. The EC, which is the executive body of the European Union, is looking into allegations that Microsoft violated European antitrust rules by "using illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems."

More about: BBC, British Airways, Department of Trade and Industry, European Commission, GlaxoSmithKline, Lloyds TSB Group, Microsoft, OFT

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