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article imageLawsuit Saying Microsoft Misled Customers in Vista Marketing Goes Class-Action

By Chris Hogg     Feb 26, 2008 in Business
Microsoft is no stranger to lawsuits but a ruling by a U.S. judge could bring about a major headache for the software giant. The judge ruled consumers can move ahead with a class-action suit against the company for how it advertised Windows Vista.
Digital Journal — Windows Vista has been a huge seller for Microsoft, boosting the company's bottom line with more than 100 million licenses sold worldwide.
A District judge in Seattle, however, made a ruling recently that could throw a wrench into Microsoft's profit machine: Consumers can go ahead with a class-action lawsuit against the company for how it marketed Vista-capable PCs.
The lawsuit says Microsoft's labelling of PCs as being "Windows Vista Capable" is misleading for consumers because many computers simply aren't powerful enough to run all of the operating systems' features.
This whole issue got rolling in March 2007 when two consumers (Dianne Kelley and Kenneth Hansen) said they were victims of "bait and switch" sales tactics, according to Informationweek. They claimed Microsoft was being deceiving with its marketing tactics, saying in the complaint, "that they were purchasing Vista-capable machines when, in fact, they could obtain only a stripped down operating system." Then, Microsoft tried to have the case thrown out but judge Marsha Penchman rejected the request.
As Associated Press notes, however, Pechman certified the class-action but limited the scope to "focus primarily on whether Microsoft's 'Vista Capable' labels created artificial demand for computers during the 2006 holiday shopping season, and inflated prices for computers that couldn't be upgraded to the full-featured version of Vista, which was released at the end of January 2007."
Critics have noted many people have purchased Vista-capable machines expecting them to be able to handle the resource-hungry OS, when it fact they were only capable of running the most stripped-down version called Vista Home Basic (Microsoft sells six different versions of Vista).
The judge's limitations on the class-action suit mean the plaintiffs cannot argue Microsoft deceived customers. Instead, Penchman said a lawsuit may address "price inflation" and argue PC buyers suffered more out-of-pocket expense as a result of Microsoft's marketing tactics that boosted the price of systems that could run Vista.
Microsoft is now reviewing the decision that could open the flood gates and see many people join in this lawsuit.
More about Windows vista, Class action lawsuit, Microsoft
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