Bundling of Microsoft Windows

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Bundling of Microsoft Windows is when computers have been installed with Microsoft Windows before purchase. Microsoft encourages original equipment manufacturers (OEMs) of personal computers to include Windows licenses with their products, and agreements between Microsoft and OEMs have undergone antitrust scrutiny. Users opposed to the bundling of Microsoft Windows have sought refunds for Windows licenses, and although some customers have successfully obtained payments (in some cases after litigation or lengthy negotiations), others have been less successful.

Contents

The "Windows tax"[edit]

A common complaint[1] comes from those who want to purchase a computer without a copy of Windows pre-installed and without paying extra for the license either so that another operating system can be used or because a license was already acquired elsewhere, such as through the MSDN Academic Alliance program.[2] Microsoft encourages original equipment manufacturers (OEMs) to supply computers with Windows pre-installed[3] by presenting their dominance in computer sales,[4] engaging in private agreements[5] and arguing that consumers benefit by not having to install an operating system.[6] Because the price of the license varies depending on discounts given to the OEM and because there is no similar computer that the OEM offers without Windows, there is no immediate way to find the size of the refund. In 2009, Microsoft stated that it has always charged OEMs about $50 for a Windows license on a $1,000 computer.[7]

While it is possible to obtain a computer with no or free operating systems,[8] virtually all large computer vendors continue to bundle Microsoft Windows with the majority of the personal computers in their ranges. The claimed increase in the price of a computer resulting from the inclusion of a Windows license has been called the "Windows tax" or "Microsoft tax" by opposing computer users.[9][10] The Findings of Fact in the United States Microsoft antitrust case of 1998 established that "One of the ways Microsoft combats piracy is by advising OEMs that they will be charged a higher price for Windows unless they drastically limit the number of PCs that they sell without an operating system pre-installed. In 1998, all major OEMs agreed to this restriction."[5] Microsoft also once assessed license fees based on the number of computers an OEM sold, regardless of whether a Windows license was included; Microsoft was forced to end this practice due to a consent decree.[9] The decree, entered into in 1994, barred Microsoft from conditioning the availability of Windows licenses or varying their prices based on whether OEMs distributed other operating systems; author Wendy Goldman Rohm said that the decree was effective in allowing Dell and HP to offer Linux computers.[11] In 2010, Microsoft stated that its agreements with OEMs to distribute Windows are nonexclusive, and OEMs are free to distribute computers with a different operating system or without any operating system.[6]

Users can avoid the "Windows tax" altogether by assembling a computer from individually purchased parts or purchasing a computer from an OEM that does not bundle Windows. Some smaller OEMs and larger retail chains such as System76 have taken to specializing in Linux-based systems to their advantage from major suppliers' paucity of non-Windows offerings. Some Linux distributors also run 'partnership' programs to endorse suppliers of machines with their system pre-installed.[12]

Boot locking concerns[edit]

See also: Windows 8#Secure boot

Microsoft requires that OEMs support UEFI secure boot on their products to qualify for the Windows 8 Logo Program.[13] Concerns have been raised that OEMs might ship systems that do not to allow users to disable secure boot or install signing keys for alternative operating systems.[14][15] Such computers would be unable to boot any non-Windows operating system (unless that operating system was signed and its keys included with the computer),[16] further complicating the issue of Windows refunds. While Microsoft claims the OEMs would be free to decide which keys to include and how to manage them,[17] competing OS vendors' relative lack of influence on the desktop OS market compared to Microsoft might mean that, even if signed versions of their operating systems were available, they might face difficulties getting hardware vendors to include their keys, especially if end users won't be able to manage those keys themselves.[18] Boot locking is now required for ARM devices.[19]

License refund policy[edit]

Microsoft does not provide refunds for Windows licenses sold through an OEM, including licenses that come with the purchase of a computer or are pre-installed on a computer.[20]

According to Microsoft's End User License Agreement for Windows 7, the ability to receive a refund for the operating system is determined by the hardware manufacturer:[21]

By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, contact the manufacturer or installer to determine its return policy. You must comply with that policy, which might limit your rights or require you to return the entire system on which the software is installed.

Acer has a policy of requiring the customer to return items at his or her own expense, and the balance received by the customer can be as low as €30.[22] In other cases, vendors have asked that customers requesting refunds sign non-disclosure agreements.[23][24] Older versions of Microsoft Windows had different license terms with respect to the availability of a refund for Windows:[25]

By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, contact the manufacturer or installer to determine their return policy for a refund or credit.

Based on the updated language, vendors refused to issue partial refunds for Windows licenses, requiring that the computer be returned altogether. In some countries, this practice has been ruled a violation of consumer protection law.[26][27]

License refund cases[edit]

Dell[edit]

  • In 2006, a British man, Dave Mitchell, purchased a Dell Inspiron 640m laptop bundled with Microsoft Windows XP Home SP2 pre-installed, but did not accept Microsoft's End User License Agreement (EULA). Within one week of requesting a refund from Dell, the customer received a "goodwill" refund of GBP £47 (£55.23 including VAT) from Dell for a "no Windows" option, as the copy of the system was an "unused product" according to the software license agreement. Dell had not asked for the installation medium to be returned and commented that although it doesn't have a Windows refund program, giving a refund in an individual case isn't forbidden either.[28][29]
  • In the same period, a Swiss man received a refund of about CHF 150 from Dell. The laptop model and refund procedure was the same.[30]
  • In 2007, Serge Wroclawski, an American Dell customer purchased a laptop and received $52.50 refund from Dell for unused Windows bundled to the computer.[31]
  • According to Süddeutsche Zeitung, a German Dell customer replaced the preinstalled Windows with Linux and was credited the amount of €78 for the operating system and a further unspecified Microsoft program.[32]

Acer[edit]

  • A French court ordered Acer to refund the purchase price of pre-installed laptop software amounting to €135.20 for Windows XP Home.[33]
  • Acer US has a Windows refund program where a user can ship a computer with an unused copy of Windows to the Acer service center and have the computer returned without Windows for a refund.[34]

ASUS[edit]

  • ASUSTeK Computer Inc. refunded €42.00 for an unused copy of Microsoft Windows 8 in Croatia on the customer's request.[35]

HP[edit]

  • In a civil suit, an Italian court rejected HP's argument that the licensing conditions had been set unilaterally by Microsoft and ordered HP to reimburse a customer the amount of €90 for an unused copy of Windows XP bundled with a Compaq notebook.[32]

Lenovo[edit]

  • Lenovo states that it "does not provide refunds or credits for portions of a packaged offering provided at a single price or for preloaded programs installed by Lenovo".[36]
  • In August 2008, Mr. Kamil Páral, a Lenovo ČR customer, tried to return the license for using the pre-installed operating system from Microsoft in accordance with the Windows Vista EULA because he wanted to use Linux on his computer. In accordance with the terms of the EULA he contacted Lenovo ČR for refund, and after some lengthy negotiations with representatives of Lenovo ČR's technical support and management, he was offered financial compensation for returning the license in the amount of CZK 1950 ($130, €78), pending his acceptance of the non-disclosure agreement. Mr. Páral decided not to accept the offer under such conditions, and forgo the offered compensation. He published an account of his experiences on http://abclinuxu.cz. The editors of the website decided to reward Mr. Páral for publishing the article by paying him an author's royalty in the same amount as was the offered compensation for returning the license.[37][38]
  • In March 2010, Brazilian systems analyst Otto Teixeira was refunded R$ 229,00 for a Windows XP Home OEM pre-installed on his netbook. Lenovo Brasil first claimed that an OEM license couldn't be refunded as it was part of the computer and even claimed via email that if he didn't want the Windows XP installed he shouldn't have bought the netbook. Later in the negotiations, Lenovo Brasil also suggested that the refund policy message should not have been displayed and therefore his operating system was presenting some kind of error. In the end Lenovo Brasil agreed to refund him about a month later. Teixeira took advice from customer rights' organizations during the process.[39]
  • In November 2010, Mr. S. Petrus from France won the case against Lenovo which previously refused to pay him the Windows tax refund. The Court of Cassation ruled in favor of Mr. S. Petrus, stating that the bundling was unlawful based on Directive 2005/29/EC.[26][40] On January 9, 2012 in continuation of this case judge Jean-Marie Dubouloz ordered Lenovo to pay Petrus legal costs of €1,000 (around US$1,300) and damages of €800, as well as the license refund of €120, observing that "It is commonly accepted that the price of a piece of software represents 10 percent to 25 percent of the price of a computer".[41]

Medion[edit]

  • 2011-01-14 Asger Jørgensen was awarded 850 DKK by The Danish Consumer Agency from ALDI where he had bought a computer with Windows Vista.[42][43] President for OEM in Microsoft Denmark, Kim Enrum, confirms that: "Our license terms makes it possible for PC-producers to refund the operating system."[43]

Public response[edit]

The difficulties associated with getting a Windows refund from OEMs have evoked a strong response from the public. Websites have been created for the specific purpose of spreading information about the issue and educating others on their options for getting a refund.[44] In the past, public events (such as the Windows refund day in 1999[45] which gained significant media attention[46][47][48][49][50]) have also been organised, with people expressing their displeasure towards Microsoft and computer OEMs for the bundling of Windows with new computers. The overall goal of such events has been to get OEMs to expand their selection of computers without a copy of Windows pre-installed, with the additional goal of getting them to revise and improve their refund policies while the first goal has not been met.[51]

See also[edit]

References[edit]

  1. ^ "Buying without Windows-Don't want Windows?". Best Price Computers Ltd. February 2007. 
  2. ^ "Call on students". 2009-09-27. 
  3. ^ Lettice, John (2000-11-28). "MS: it's (nearly) illegal to buy PCs without Windows". The Register. 
  4. ^ Möller, Erik (2001-10-23). "Microsoft's Dirty OEM-Secret". Kuro5hin. 
  5. ^ a b "U.S. v. Microsoft: Court's Findings of Fact". 1999-11-05. 
  6. ^ a b Protalinski, Emil (2010-01-07). "Italian class-action suit targets unwanted Windows installs". Ars Technica. Condé Nast. Retrieved 2012-12-28. "However, consumers benefit from the preinstallation of Windows on PCs. It provides the best user experience from the time a consumer first turns on the PC, and saves consumers the substantial effort and resources associated with having to install an operating system that functions properly." ... "Computer manufacturers are free to sell PCs pre-installed with another operating system or no operating system at all," the [Microsoft] spokesperson continued. "It's also important to note that Microsoft's agreements with OEMs are nonexclusive." 
  7. ^ Protalinski, Emil (2009-09-16). "OEMs pay Microsoft about $50 for each copy of Windows". Ars Technica. Condé Nast. Retrieved 2012-12-28. 
  8. ^ "Microsoft official "valued customer" statement". 
  9. ^ a b Reimer, Jeremy (2007-05-25). "Dell goes Ubuntu; "Windows tax" is $50 according to pricing". Ars Technica. Condé Nast. 
  10. ^ Demerjian, Charlie (2007-03-03). "Cost of Windows tax calculated". The Inquirer. Incisive Financial Publishing. 
  11. ^ Fried, Ina (2004-07-09). "Microsoft's 1994 consent decree: Boon or bust?". CNET. Retrieved 5 February 2013. 
  12. ^ "Find a Partner". Ubuntu Partners. Canonical. 
  13. ^ van der Hoeven, Arie (September 20, 2011). "Delivering a secure and fast boot experience with UEFI". 
  14. ^ Garrett, Matthew (September 20, 2011). "UEFI secure booting". 
  15. ^ Anderson, Ross (September 20, 2011). "Trusted Computing 2.0". 
  16. ^ Leyden, John (September 21, 2011). "Windows 8 secure boot would 'exclude' Linux". The Register. 
  17. ^ Sinofsky, Steven (September 22, 2011). "Protecting the pre-OS environment with UEFI". 
  18. ^ Garrett, Matthew (September 23, 2011). "UEFI secure booting (part 2)". 
  19. ^ Williamson, Aaron (January 12, 2012). "Microsoft confirms UEFI fears, locks down ARM devices". 
  20. ^ "Microsoft North American Retail Product Refund Guidelines". Microsoft. Retrieved 2012-08-27. 
  21. ^ "Microsoft Software License Terms: Windows 7 Professional". 
  22. ^ "Man wins damages from Acer over Voleware refund". The Inquirer. Incisive Financial Publishing. 2007-09-22. 
  23. ^ Hillenius, Gijs (2008-08-31). "CZ: Lenovo fails to silence GNU/Linux user on Windows refund". Open Source Observatory & Repository Europe. Archived from the original on 2011-07-20. 
  24. ^ Lilian, Niv (2008-12-03). "Dell customer awarded Windows refund". Ynetnews. 
  25. ^ "Microsoft software license terms for Windows Vista Home Basic, Home Premium and Ultimate versions". 
  26. ^ a b "Cour de cassation, civile, Chambre civile 1, 15 novembre 2010, 09-11.161, Publié au bulletin" (in French). 2010-11-15. 
  27. ^ "DIRECTIVE 2005/29/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL". 2005-05-11. 
  28. ^ Ward, Mark (2006-11-14). "User refund for no Windows option". BBC News (BBC). Retrieved 2010-01-15. 
  29. ^ Marti, Don (2006-11-08). "Dell: Windows refund yes, Windows refund policy no". LinuxWorld. Archived from the original on 2009-06-02. 
  30. ^ "Portatili Dell e rimborsi di Windows" (in Italian). Punto Informatico. 2006-10-20. 
  31. ^ Sulzberger, Jay (2007-01-05). "How to get a Windows tax refund". 
  32. ^ a b "HP must reimburse Italian PC buyer the amount paid for Microsoft software". 2007-10-29. Archived from the original on 2009-03-04. 
  33. ^ "Ruling: Acer must refund purchase price of pre-installed software that is not being used". heise online. 2007-09-26. 
  34. ^ "How do I obtain a refund for the Microsoft Windows Operating System?". 2011-04-04. 
  35. ^ "Kako do povrata novaca za neiskorištene Windowse (How to get a refund for an unused copy of Windows)". 2013-03-20. 
  36. ^ "Lenovo community: Windows Refund". 2009-10-01. 
  37. ^ "AbcLinuxu.cz Reimbursed User for MS Windows License from Lenovo ČR". AbcLinuxu.cz. 2008-08-20. 
  38. ^ Paul, Ryan (2008-08-31). "Lenovo won't refund the Windows tax without an NDA". Ars Technica (Condé Nast). Retrieved 2009-11-20. 
  39. ^ Pavarin, Guilherme (2010-03-24). "Ele rejeitou o Windows e foi reembolsado" (in Portuguese). INFO Online. 
  40. ^ Cuif, Frédéric (2010-11-17). "Arrêt Pétrus ¢ Lenovo du 15 novembre 2010 : la Cour de cassation rétablit l’équilibre à l’égard des consommateurs" (in French). 
  41. ^ Sayer, Peter (2012-02-07). "Lenovo ordered to pay €1920 for making French laptop buyer pay for Windows too". Techworld. 
  42. ^ "Forbruger fik tilbagebetalt prisen for styresystem til computer" (in Danish). forbrug.dk. 2011-01-14. 
  43. ^ a b Gitte Bank Jensen (2011-01-14). "Køb din computer billigere uden program" (in Danish). 24timer. 
  44. ^ "AFUL Racketware.info". Retrieved 2010-01-05. 
  45. ^ Merlin, Marc. "Windows refund day". Retrieved 2010-11-12. 
  46. ^ "ABC News: Windows refund day video". 1999-02-15. 
  47. ^ "Windows refund day". BBC News (BBC). 1999-02-16. Retrieved 2010-01-05. 
  48. ^ "A tiny protest makes a big noise". Slashdot. 1999-02-17. Retrieved 2010-11-12. 
  49. ^ Harmon, Amy (1999-02-16). "Self-Proclaimed Computer Geeks Hold 'Windows Refund Day'". The New York Times. Retrieved 2010-11-12. 
  50. ^ Evangelista, Benny (1999-02-16). "They Don't Do Windows". The San Francisco Chronicle (Hearst Communications). Archived from the original on 2009-04-27. Retrieved 2010-11-12. 
  51. ^ Kosmin, Adam (2003-06-27). "Windows Refund Day II: Next Steps". Linux Journal. Retrieved 2010-11-12. 
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