Class Action lawsuit against Microsoft denied

Posted by Samantha Rose Hunt

Chicago (IL) - Last week it appeared Microsoft might have had a chance at winning this case, but this week their fate seems grimmer. The company may not be required to fork over much dough, however, since the plaintiffs were unable to prove that the company's actions harmed a plurality. Still, on a case-by-case basis it is likely Microsoft will lose as a revealing email by Jim Allchin indicates quite clearly Microsoft was aware of the potential confusion before the campaign launched.

Microsoft certification branded "Vista Capable PCs" as such without stressing to consumers that the PCs were designed only to run at the barest minimum of Vista Basic - which is the lowest level of the many products of Vista. Unfortunately, some of these PCs weren't capable of running more powerful versions, or were not able to run them with all of the program features enabled.

The Vista Home Basic lawsuit alleges that Microsoft's Vista Capable program would inflate the prices of PCs that were only capable of running that edition, thus enticing users to purchase machines that would not be able to upgrade to a better version of Vista at a later date. Individuals and consumers involved in the lawsuit feel that they were cheated, and not given the "real Vista" because it doesn't have the Aero glass user interface.

Microsoft denies false advertising and claims their campaign was fair and honest. Unfortunately, an Internal e-mail from then-president Jim Allchin to his colleagues suggests otherwise, and actually alludes to the fact that he was scared the multiple versions could quite possible cause frustration and confusion among consumers. The e-mail also indicates Allchin was not willing to deceive the masses. The memo was made public during the discovery phase of the "Vista Capable" class-action case in Washington State District Court.

"I believe we are going to be misleading customers with the Capable Program," reads Allchin's e-mail. "OEMs will say a machine is Capable and customers will believe that it will run core Vista features." This e-mail is being interpreted by the court as a warning to colleagues, and not an approval to move forward with false advertisements and confusing product information.

Yesterday US District Court Judge Marsha Pechman ruled that the original plaintiff Dianne Kelly could potentially have a case if she pursues how Microsoft's actions directly affected her and only her. However, as far as proving a plurality of customers had been harmed Kelly's case was incapable. "Plaintiffs' evidence fails to establish class-wide causation because it does not attempt identify a specific shift in the demand for Vista Capable PCs," Judge Pechman wrote.

The judge then went on to cite the testimony of plaintiff's expert witness, Dr. Keith Leffler, an economist with the University of Washington who has calculated that it would cost anywhere from $3.92 billion to $8.52 billion to upgrade all of the PCs that were sold as Vista Capable so that they would be able to run the premium versions of Windows Vista.

This number was computed by utilizing data provided by Microsoft, and arrives at how many "Vista upgradeable" PCs had been sold in the United States between April 2006 (when the Vista Capable Campaign began) through to January 2007 (when Vista hit the market and the marketing campaign ended). It was deemed that 13.75 million notebooks and 5.65 million desktop PCs had been classified "Vista Capable" when they were not actually able to meet the harsher "Premium Ready" requirements.

Basically, what this means is while it might be possible to assume customers would not have wanted a lesser version, it is not possible to estimate the exact number of customers who would. For the class-action status of the lawsuit to go forward, Leffler would have had to be able to classify the harm caused to a plurality; the judge determined that he was not able to do this.

Dr. Leffler suggested that the fact that the Vista Capable program existed drove up the sales of Windows XP for a period of time. This was refuted, as it could be argued that owning XP prior to the development of Vista did not harm anyone and therefore it would not harm anyone afterward.

These fouls do not necessarily mean that the plaintiffs have lost the case. In fact, these revelations might guarantee that Kelley still has a case.

Microsoft's motion for a summary judgment in its favor, which cited the e-mail from Allchin, was denied.

The judge closed her ruling yesterday by warning Microsoft that the termination of the class-action status of the lawsuit should not lead the company to believe that the original plaintiff, Kelly's case would not be able to go to trial.