Dealer files antitrust complaint against Microsoft

A Dutch software dealer has filed a complaint against Microsoft with the European Commission, arguing that the company's pricing policy in Europe violates antitrust laws.

Company owner Samir Abdalla's complaint is that Microsoft charges at least a third more for its software in Europe than it does in the U.S. Abdalla's lawyer, Gerard van der Wal of the Houthoff Buruma practice, said his client had begun a legal proceeding "this week" and was seeking clarification from the commission.

"At this stage, we are asking the court to accept that there has been a violation of the relevant European law," he told ZDNet UK on Friday. "Clearly, the commission does not enter into a discussion at this point."

According to Abdalla's lawyers, the price difference between Europe and the U.S. is between 30 percent and 50 percent. "The evidence is fairly clear," van der Wal said. "There is a huge price difference, and Microsoft uses its intellectual property to control that."

Abdalla is already engaged in legal proceedings with Microsoft. In May, Microsoft sued Abdalla as principal of the Dutch company HW Trading, alleging he had received more than $3.7 million (2.4 million pounds) from the illegal sale of unlicensed Microsoft software in the U.S.

The lawsuit, filed in California Central District Court, claims Abdalla took advantage of an Egyptian government program that provides low-cost software to citizens. Abdalla allegedly exported the software in that scheme to U.S. dealers and replaced it with counterfeit software in Egypt.

In response to that complaint, Abdalla has accused Microsoft of stifling trade in the so-called "gray market," which he argues is legal under European law. The gray market usually describes a market where goods, such as software, can be bought and traded freely even though a supplier has tried to ensure that the goods are only used in the country for which they are intended.

As for the current legal proceedings, van der Wal said he hopes the evidence will be put before the commission, "and we will go from there." He said he expects it will take "a few weeks" before the case can move any further.

Colin Barker of ZDNet UK reported from London.

[The User]

Good luck to Samir Abdalla - challenge everything. A car can cost much more in UK than in US. Sue all car companies. Germany has higher taxes then Canada - sue Germany. Bananas are more expensive in London than they are in Costa Rica - sue banana distributors.

At the end, it will be Abdalla's lawyers who will enjoy the benefits of this action.

[Mr. Dee]

Mr. Abdalla should be in jail. He is only using this reverse psychology lawsuit to save his behind from being imprisoned for piracy.

[HlLLARY CLITON]

".......He said he expects it will take "a few weeks" before the case can move any further. "


try YEARS

[Draq Wraith]

"Grey market" legal Since when after the copy protection laws were put in place in the netherlands? He got caught and now has to pay the taxes he evaded. good luck with your lawsuit if the courts do not laugh you out of court it is only due to the politeness of the judges.

D~W

[Lerianis]

Excuse me, but you are automatically assuming that those laws are legal in themselves. Most sane people know that they are not, but are too milquetoast to challenge them in court. This guy is not, so I am hoping that he wins his case and Microsoft stops having a de-facto decision on who sells and for what price.

[tm_anon]

If this were about tax evasion, the government would be involved, not MSFT. This is about selling something intended for one country in another. As long as you provide the knowledge that this software was intended for another region, there's nothing unethical or unreasonable being done. MSFT is sueing so that the sale to one region at a higher price can continue unabated. The gray market is legal in the regions he was selling from, he purchased the software and was reselling it, not selling stolen merchandise. He paid the taxes for the purchase of the software in the country in which he bought it and since it has not been brought up, I will assume that the applicable taxes for the sale of the software were being paid as well. The only entity with any claim to damages in this case is MSFT and the only damages they can claim is that they did not recieve AS MUCH profit as they would have. However, I'm betting the volume of sales being done allowed for greater quanitities to be sold. If you make a small profit off of lots of merchandise, it's always better than if you made a lot of profit off of just one piece of merchandise do to your insanely high prices. Maybe MSFT should take a lesson from Abdalla and reduce their prices. If they did that, then maybe they'd start selling more of their Vista crapware.

[contentcreator--2008]

"If you make a small profit off of lots of merchandise, it's always better than if you made a lot of profit off of just one piece of merchandise" .... you write on your Mac as you sit in your Nike sneakers, Gucci jeans, drinking Heineken. Welcome to Marketing 101, kids.

[contentcreator--2008]

Somehow it's always the guys with the higher price complaining about geographically-based pricing. Here it seems that Microsoft went out of their way to give a lower price to Egypt to adapt to conditions there, and instead of that being a good thing, they get flamed. "Let no good deed go unpunished."

The same happens with drug pricing too --- can you give a discount on drugs in areas with lesser average income? I think many people think that's a good idea. But somehow they are quick to whine once they see someone else getting a better deal.

if you want to give companies the ability to offer discounts in some regions, then you MUST permit the flip side -- the ability to maintain the higher price elsewhere. You can't have it both ways.

[ferretboy88]

He is a loser. I will sue phone companies for me paying a higher rate as an American. How silly. He is just suing because they are trying to sue him first.

[timber2005]

Well... the UK region *did* put Microsoft through some hoops to produce UK specific versions (the -N series).
But reguardless, prices don't have to be equal worldwide for a product or service. And I would bet heavily Microsoft isn't the only one with unequal pricing.

[mattumanu]

I hate auto playing video. I've said this over and over again and yet you people still have ads that play video automatically. The iPhone ad that plays at the top of the main page has no way to stop it after it starts. Therefore, I've blacklisted this site on my network for the weekend. We'll see what happens by monday.

[Imalittleteapot]

Use a hosts file or adblock or something maybe.

[ktswami]

If you're using Opera, right-click, "block content" on the context menu...click on the video area.

Done.

[Seaspray0]

Why don't you take this issue up with apple? I have no problems stopping it with my browser.

[Imalittleteapot]

Don't know much about this. The free market approach would say if the demand is higher in one region then you should sell it for more in that region. If it's worth more there then sell it for more. However, I don't know a thing about UK copyright law or antitrust law.

[Spartan_458]

Good luck, dude. You're gonna need it going up against Microsoft.

I don't really understand what the difference is. Microsoft should be free to set whatever prices they want. It's not like they're forcing consumers to buy Windows and Office.

[t8]

Whatever happens Microsoft is still evil.

[vini156]

Every company is evil. The diff. between MSFT and others is evilness lies behind the walls of the companies & is a secret but in case of MSFT internal mail leaks, memo leaks and others internal info. became public thats why the reputation is down to the floor. If any other company's internal info. is out you will know, that there are no angles out there. Thts why I say Love products not companies.

[Vegaman_Dan]

Keep in mind that Apple is in the same situation as they charge different prices for music in iTunes depending upon which country the sales are taking place. This isn't unusual and is pretty commonplace.

[fejack]

Carmaker Daimler Benz lost a case for trying to prevent German clients to purchase a car in Italy, where the price was significantly lower. That is because the European Union laws guarantee a free market.

[Hernys]

First, this is now tiwhin the EU. It is between egypt and the EU.
Second, this is about applying a contract signed in a country (where Microsoft was providing software at a low cost to the egyptian government) to other people in another country.
By that same logic (and yours) if Microsoft gave away some software to anyone, everyone should be able to get it for free.

[SeizeCTRL]

Good old Samir should try suing the oil companies next. Gas or petrol should I say costs 2-4 times what it does in the US.

[Vegaman_Dan]

Apple charges different prices for songs in iTunes depending upon your location.

Airlines charge more for flying from Chicago to Atlanta than they do from Atlanta to Chicago on round trips. (silly but true at various times of the year based upon market demand)

Gas prices are set far higher in downtown cities than in far flung farming communities because people will pay for it more there.

Fast food costs more at those airports than it does in residential areas.

It's called a free market. If you want to go after Microsoft, then be prepared to go after single company that does it- GM, Walmart, McDonalds, Microsoft, Apple, Dell, HP, BP, United Airlines, etc.

[inachu]

I really really do not like Microsofts lic rules at all. USA immigrants or once they become USA citizens of course they need to speak english but it would be nice to enter a computer store and find Windows XP in ones native language. I do not speak chinese but a friend of mine gave me money to buy Norton Antivirus and Windows XP chinese edition when I flew to china last year.... The REAL thing and not fake/illegal. It is really sad they do this.

[alegr]

Microsoft has a good excuse: higher compliance expences in EU... Like a billion euros ransom...