Law firm fires second complaint at Microsoft

The Auckland law firm which 11 weeks ago complained to the Commerce Commission about Microsoft has laid a separate complaint under the Fair Trading Act.

The Auckland law firm which 11 weeks ago complained to the Commerce Commission about Microsoft has laid a separate complaint under the Fair Trading Act.

The first complaint, by InfraServ, a division of law firm Clendon Feeney, was to do with Microsoft’s exercise of market power under the Commerce Act.

The new complaint alleges a fair trading breach and relates to an electronic brochure issued by Microsoft to software dealers entitled “Licensing Programs Change After July 31: Understand Your Options”.

The brochure says if customers buy an Upgrade Advantage licence before July 31 they are guaranteed the right to upgrade to the current version of a product as well as rights to the forthcoming version at no additional charge.

Clendon Feeney alleges the brochure breaches section nine of the Fair Trading Act, which deals with misleading conduct. Partner Craig Horrocks says it’s misleading to say customers are guaranteed rights to forthcoming products and that the brochure may not accurately summarise the actual contractual provisions in Microsoft’s Open Licence 6.0.

“The formal contract does not provide the right to upgrade to any forthcoming version because Microsoft is not bound to issue another version in the two-year period of the upgrade contract. As the contract is for a two-year period only, if Microsoft does not issue a ‘forthcoming’ product within two years there is no right of refund.”

Microsoft New Zealand’s small and medium-sized business division manager, Alex Morcom, said last week Microsoft had just been made aware of the complaint.

He says Upgrade Advantage gives customers the right to the most current version of the product and to any new version that comes out during the two-year term of the agreement. “It also grandfathers those customers into Software Assurance if they wish to use that programme going forward. If a customer has older versions of Microsoft products, but wants to take advantage of Software Assurance, purchasing Upgrade Advantage is the most cost-effective way to do that.”

Horrocks also takes issue with the brochure’s contention that if an Office 97 customer buys Upgrade Advantage before July 31 they get a saving of 39% as opposed to buying a new licence after July 31. “It isn’t a saving if it’s what you had before.”

The Commerce Commission is still assessing whether to investigate the first complaint and says the second complaint won’t be dealt with until a decision is reached on the first.

If it thinks there is a breach of the Commerce Act, it has a range of options. It can issue a warning, offer a settlement, which usually involves an undertaking by the company involved to change its behaviour, or take court action.

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