Microsoft Shrugs At Vista-To-XP Downgrade Suit

Software maker says it doesn't get a cut of fees charged for converting Vista PCs to Windows XP.
Microsoft says an antitrust suit that charges the software maker with using monopoly power to profit from Windows Vista to Windows XP downgrades is baseless because it makes no money off of such conversions.

"Microsoft does not have a downgrade program," a company spokesman said in an e-mail to InformationWeek. "It does offer downgrade rights as part of some Windows Vista licenses, including Windows Vista Business purchased through the OEM channel. Microsoft does not charge or receive any additional royalty if a customer exercises those rights."

A Los Angeles computer user filed a lawsuit against Microsoft last week, claiming that fees charged for downgrading PCs from Windows Vista to the older XP operating system violate antitrust rules.

Emma Alvarado says in court papers that she was forced to pay $59.25 to downgrade a Vista-based Lenovo system she bought last year to XP. Alvarado claims Microsoft and its partners are able to impose such fees due to a lack of competition in the PC market.

"Since the introduction of Vista, Microsoft has effectively eliminated competition in the operating system PC market and created a monopoly position for itself in that market," Alvarado claims in papers filed in U.S. District Court in Seattle.

"Microsoft has used its power to coerce OEMs, internet access providers and others into agreeing to restrictive and anti-competitive licensing terms for its Windows XP operating system in order to stifle competition in the market," according to Alvarado's complaint. "Microsoft did so in order to maintain, protect, and extend its market power in operating systems software into the next generation of personal computing, to lessen competition, and to enhance its monopoly position."

Vista's heavy horsepower requirements and intrusive security measures, as well as its incompatibility with older applications, have proven unpopular with many computer users. As a result, many have downgraded their systems to XP.

Most vendors offer Vista-to-XP downgrades, but at a price.

"Microsoft has used its market power to take advantage of consumer demand for the Windows XP operating system by requiring consumers to purchase computers pre-installed with the Vista operating system and to pay additional sums to 'downgrade' to the Windows XP operating system," Alvarado's suit states. The suit claims that one-third of all computers purchased with Vista on board have been downgraded to XP and that Microsoft has prohibited its hardware partners from selling systems with XP pre-installed since Vista arrived on the market two years ago.

Alvarado is seeking unspecified damages and wants the court to make her case a class action. Microsoft has yet to file a formal legal response to the allegations.

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