By Joel Rosenblatt
Feb. 13 (Bloomberg) -- Microsoft Corp., the world’s largest software maker, was sued over claims it relies on predatory and anti-competitive behavior to charge consumers to downgrade operating systems on their personal computers.
Emma Alvarado of Los Angeles County, California, sued Feb. 11 in Seattle federal court, asking for class-action, or group, status on behalf of consumers who want to buy computers with pre-installed Microsoft Windows XP instead of the company’s newer operating system, Vista, released in 2007.
“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,” according to the complaint.
Microsoft is trying to salvage Vista, which businesses and consumers panned after it went on sale in 2007. With the economy shrinking, companies are putting off new projects and technology purchases. Windows sales declined 8 percent last quarter, compared with Microsoft’s forecast for growth of as much as 10 percent.
Microsoft charged consumers $104 for the downgrade, and extended the offer to July, “likely due to the tremendous profits that Microsoft has reaped from its downgrade option,” according to the complaint.
David Bowermaster, a spokesman for Redmond, Washington- based Microsoft, declined to comment on the lawsuit in an e-mailed statement because the company hasn’t been served with the complaint.
Microsoft offers, and doesn’t charge for, downgrades included in some Windows Vista licenses, Bowermaster said in the statement.
The case is Alvarado v. Microsoft, 09-189, U.S. District Court, Western District of Washington (Seattle).
To contact the reporter on this story: Joel Rosenblatt in San Francisco at rosenblatt@bloomberg.net.
Last Updated: February 13, 2009 18:42 EST
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