MSFT Online Charge Class-Action Lawsuit
The class-action lawsuit in the MSFT Online Charge case asserts that Microsoft has engaged in anti-competitive practices by enforcing exclusionary and price-fixing agreements with ISPs. Microsoft also has monopoly power in the market for PC operating systems and has been acting in an anticompetitive manner to maintain that monopoly. This illegal conduct violates Section 2 of the Sherman Act. It also violates antitrust laws.
Microsoft’s anticompetitive practices
A recent ruling by a U.S. District Court judge rules that Microsoft violated the Sherman Antitrust Act in suppressing competition. Although Microsoft is not required to lower prices, it has a history of price gouging. The lawsuit was filed because Microsoft’s monopoly was causing consumers to pay astronomical prices for its products. However, the judgment does not affect Microsoft’s prices, so it should face more litigation.
The antitrust case against Microsoft was one of the highest-profile cases of the 1990s. It involved the United States Department of Justice and the Federal Trade Commission, both of which sued Microsoft because it was using monopolistic practices. Eventually, the U.S. Department of Justice brought the case again in 1998. The government found that Microsoft was imposing unfair pricing on users by locking them out of competing for software. This forced consumers to purchase the same operating system multiple times.
Exclusionary agreements with ISPs
The Exclusionary Agreements with ISPs that Microsoft has entered into are a central part of the lawsuit against Microsoft. These agreements require ISPs to use Microsoft’s Navigator browser as their default browser for all customers. Microsoft views these agreements as standard cross-marketing arrangements that do not violate antitrust laws. Similarly, Netscape has such agreements with regional Bell operating companies, requiring them to make Navigator the default browser for all customers. Plaintiffs argue that if Microsoft eliminates its restrictions with ATT and MCI, these agreements with Netscape will also be terminated.
The DOJ argues that Microsoft attempted to monopolize the web browser market and carved up the market with Netscape, a competitor. The DOJ claims that Microsoft’s proposal to split the market with Netscape was illegal. Judge Jackson agreed. American Airlines also suggested splitting traffic with Braniff. The filing cites more than 47 pages describing Microsoft’s violation of the Sherman Act, while other pages assert Microsoft’s violation of section 1 of the law.
Xbox LIVE subscription class-action lawsuit
An Xbox LIVE subscription class-action lawsuit filed against Microsoft has a simple but important goal: to protect consumers from double billing. Microsoft’s billing policies are ambiguous, so the company needs to defend its practices and explain why they double bill people. Ryan Graves, an Indiana resident, claims that his Xbox Live subscription was automatically renewed twice without his knowledge or consent. Graves had left his credit card number inactive for two years, but when he tried to renew his subscription, he was charged for two years worth of service. Microsoft has yet to refund him for the second half of his subscription and claims that the unauthorized use is consumer fraud.
Plaintiffs allege that the drifting issue in Xbox controllers is caused by a design flaw that Microsoft knows about. Despite this flaw, the company failed to inform consumers about the flaw in the controllers. In the meantime, Microsoft has filed a motion with the Western District of Washington asking the court to compel arbitration, which would resolve the underlying claims outside of the courtroom. Microsoft argues that the plaintiffs agreed to the Services Agreement, a legal document signed by the users when they signed into Xbox Live and purchased controllers.
Price-fixing agreements with ISPs
Microsoft has entered into exclusive agreements with ISPs, using its monopoly to force these providers to offer only Microsoft’s Internet Explorer browser. Such agreements also impose conditions on ISPs, such as offering only Microsoft’s services and not promoting competing browsers, and requiring ISPs to use Microsoft-specific programming extensions and tools. Ultimately, these practices lead to higher prices for customers.
Privacy violations by Facebook
In response to a class-action lawsuit, Illinois-based users have sued Facebook for privacy violations. Illinois has one of the strictest biometric privacy laws in the country. Facebook was found to have violated this law by failing to disclose how third-party applications could access user data. Moreover, Facebook failed to police the practices of third-party app developers. These actions have resulted in a massive settlement for the class members.
The lawsuit also claims that Microsoft has violated privacy laws by sharing data with third parties, including subcontractors and downstream firms. The company routinely uses business customer data for marketing, product development, and business intelligence. As such, the company’s practices violate US privacy laws and Washington State law. In addition, the plaintiffs claim that Microsoft automatically shares contacts with Facebook without the consent of the user. Hence, it’s unclear whether Microsoft’s actions are justified.