Wednesday, April 04, 2007

Windows Vista Class Action

Last week, a class action was filed against Microsoft for for deceptive practices in marketing Windows Vista. According to the complaint (which you can read here courtesy of the Seattle Post-Intelligencer), while Vista's release was being delayed, computers were sold with stickers identifying them as "Vista capable," even though the only version of Vista they can run is Vista Home Basic. That edition does not include the cool features that ostensibly make Vista different from its predecessors. The complaint quotes an unnamed reviewer for the proposition that Home Basic is "the most pointless edition of Windows that Microsoft has ever released." As someone who once purchased a computer that was Windows ME capable and then foolishly redeemed the coupon to "upgrade" from Windows 98 when ME became available, that strikes me as extremely damning.

The case was brought in federal court as a diversity action, which is permissible under the Class Action Fairness Act of 2005, since it alleges more than $5 million in damages and there is minimal diversity of citizenship. As to liability, it alleges unfair or deceptive practices under the consumer protection law of all 50 states and the District of Columbia. The key to winning this case for the plaintiffs will be showing that Microsoft misled consumers into thinking that "Vista capable" meant capable of doing all the cool things that Vista has been advertised as able to do, rather than capable of running an OS called "Vista." I would imagine that Microsoft will resist class certification on the ground that how individual PC makers and retailers used the stickers varied enormously and that state law differs greatly from state to state, so that nationwide class treatment is inappropriate. On the merits, according to press accounts, Microsoft contends that it has been careful to distinguish between different versions of Vista.

I went to the Vista homepage and while it's true that you can find the appropriate distinctions, you're immediately drawn to look at the "aero" and other features that have featured in the advertising campaign but don't run on Vista Home Basic. So if the plaintiffs can get by class cert, I think they have a decent chance of prevailing. Of course, it seems highly unlikely that the case would go to trial rather than settle. The question would then be for what. I'm not a big fan of coupon settlements, and current law requires special approval for coupon settlements, but at least for people who bought machines that are in fact capable of running more advanced versions of Vista, a coupon for such a version at the price that Windows Home Basic was promised seems like a fair deal. The harder remedial question is what to do for the people who bought machines that lack the hardware to run one of the more sophisticated versions. Those people won't benefit from a coupon for Vista.