Microsoft Moves Against Alleged Channel Piracy

Microsoft Corp. has filed 21 lawsuits in federal court in 14 states against resellers the company alleges engaged in selling pirated software, including some alleged repeat offenders. Microsoft claimed the companies misled customers by repeatedly distributing unlicensed copies of Microsoft software pre-installed on the PCs that they sold.

 

 

Microsoft Corp. has filed 21 lawsuits in federal court in 14 states against resellers the company alleges engaged in selling pirated software, including some alleged repeat offenders.

In its legal actions, Microsoft claimed the companies misled customers by repeatedly distributing unlicensed copies of Microsoft software pre-installed on the PCs they sold. Some of these companies continued with their illegal business practices even after settling previous lawsuits with Microsoft, the vendor alleged.

Six of the resellers targeted do business in California, two in Texas and two in the state of Washington, according to the civil filings. Resellers in Georgia, Massachusetts, Ohio, Illinois, Arkansas, South Carolina, Florida, Tennessee, Virginia, Oregon and Colorado also were targeted.

In a statement, Microsoft officials said they took the action to protect software customers. “These legal actions are about protecting Microsoft’s customers from falling victim to some dealers who operate a business model of peddling pirated and counterfeit software,” said Sharon Cates, attorney at Microsoft. “Some companies previously involved in these lawsuits have discontinued their illegal business practices; others have not. The cases announced today are indicative of the need to ensure that dealers cease their illegal activity so that customers can be sure that they purchase genuine, fully licensed software.”

Microsoft, which periodically moves aggressively against software piracy around the world, also asked consumers to become educated about the topic and become proactive in reporting possible cases of software piracy. Company officials pointed to several resources available to help consumers ensure they receive genuine software, including the (800) RU-LEGIT (785-3448) hot line and online validation tools at http://www.microsoft.com/genuine.

The latest cases involve resellers in California and Arkansas where Microsoft claimed customers utilized the tip line to report possible illegal activity. While these latest cases are civil actions, in the past Microsoft has pursued criminal cases against  some suspected reseller software pirates.

Microsoft said that software pirates can trick consumers into buying unlicensed or non-genuine software through hard-disk loading, essentially installing unlicensed software on a PC and then selling the computer to unsuspecting consumers. In many cases,  the company added, customers who have been sold unlicensed hard-disk loaded computer systems do not receive manuals or the original media, although the resellers often charge them the full price. Many customers do not realize that the software pre-installed on the computer systems they purchased is not legitimate until they perform a check through the Windows Genuine Advantage (WGA) or Office Genuine Advantage (OGA) online validation tools.

Microsoft claimed its latest action is supported by channel partners who feel they are undercut by more unscrupulous resellers. “Knowing Microsoft is targeting resellers of illegal software in my area gives me one less thing to worry about,” said Tim Loney, president and CEO of Solutions Information Systems, a Microsoft Gold Certified Partner and Small Business Specialist in Houston. “When the economy is struggling, it is difficult to focus on adding value to your customers when other organizations are using unfair practices to gain an advantage, especially when it comes to pricing of software.”

Microsoft claimed eight of the resellers it moved against had settled previous suits alleging sales of illegal versions of Microsoft Windows and Office.

Microsoft said it is committed to ensuring customers obtain genuine software through various educational and technical programs including one that permits customers to validate software online. If customers learn  they may have non-genuine software, validation tools provide an opportunity  report the source of the software, and customers may even be eligible to receive a genuine replacement copy.

As part of its Genuine Software Initiative, Microsoft also provides other consumers resources, including a web site dedicated to distinguishing genuine, properly licensed software from pirated software, (http://www.howtotell.com) where visual clues and tips are provided.

Microsoft added that a recent piracy study  by the Business Software Alliance (BSA) estimated that more than one-third of PCs around the world are unlicensed or contain pirated or counterfeit software. In the U.S., the piracy rate in 2007 was 20 percent, a one-point decrease from 2006. Economic losses from piracy reached an estimated $8 billion last year worldwide

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TAGS: Windows,Microsoft,software,lawsuits,piracy



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