Users launch legal battle against licensing changes

Opposition by end users to Microsoft's new licensing program -- Software Assurance -- took a new twist this week when one company lodged an official complaint under the Trade Practices Act claiming the software giant is engaging in anticompetitive behaviour.

The move is a first in the Asia-Pacific region and sets a precedent for future action by disgruntled Australian users who believe they are being locked into pricing models with very few options but to pay up.

The complaint, by Auckland firm Infraserv -- the operations arm of law firm Clendon Feeney, calls on the New Zealand Commerce Commission to investigate Microsoft for disregarding the Fair Trading Act.

According to the complaint, Software Assurance requires customers to pay two years in advance for the right to any Microsoft software upgrades. This is regardless of whether or not Microsoft releases any upgrade within those two years. In the past, customers have bought upgrades as they required them.

Clendon Feeney partner Craig Horrocks believes Software Assurance is "a mistake" and the firm, a Microsoft customer since 1990, filed the complaint because "it will affect anyone with more than a few licences of Microsoft products".

"Locking a customer into a two-year guaranteed income stream is much better than being reliant on customers deciding that an upgrade is good value before they spend their money. Being paid and not having to deliver anything is even better," Horrocks says.

"What other supplier in the world, other than possibly government through taxation, can ask you to pay for something which is not defined and if nothing is delivered still claims you receive a benefit?"

He says Software Assurance does not deliver software upgrades with certainty. "There are no service levels, there are no minimum deliverables, in fact Software Assurance promises nothing other than that the customer has the right to upgrade, if Microsoft releases any upgrade."

The Commerce Commission has confirmed that it has received what it terms an "inquiry", which will be assessed to see whether it will be treated as a complaint.

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