- Microsoft continues tribunal fight over legality of reselling Office and Windows licenses
- ValueLicensing claims Microsoft restricted resale market and seeks £270 million in damages
- Outcome could reshape the future of Europe’s second-hand software industry
Microsoft[1]’s long-running dispute with ValueLicensing[2], a UK reseller of pre-owned licenses for products like Windows and Office, returns to the Competition Appeal Tribunal this week, with the US tech giant now arguing that selling pre-owned Office and Windows licenses is unlawful.
ValueLicensing says the trial will focus on whether the entire resale market for perpetual Microsoft licenses is legal, or indeed ever has been, and the result could have huge implications for Europe’s popular second-hand software market.
The reseller contends that if Microsoft’s argument succeeds, it would mean second-hand license trading should never have existed in Europe.
A change of stance
The case, which has been going on for several years now[3], stems from ValueLicensing’s claims that Microsoft restricted the availability of pre-owned licenses.
According to the reseller, Microsoft offered customers discounts on subscription services if they surrendered their perpetual licenses, limiting the stock available to firms like ValueLicensing.
It also alleges Microsoft inserted contract clauses that curtailed resale rights in exchange for further price cuts. This strategy, ValueLicensing claims, cost it £270 million in lost profits.
Microsoft’s defense rests on the claim that it owns copyright not just to program code, but also to elements such as the graphical user interface.
The tech giant says the European Software Directive does not apply to such components, meaning resale is not allowed.
ValueLicensing boss Jonathan Horley said Microsoft’s position had shifted dramatically, from denying anti-competitive conduct to arguing that the resale market itself should not exist. “It’s a remarkable coincidence that their defense against ValueLicensing has changed so dramatically from being a defense of ‘we didn’t do it’ to a defense of ‘the market should never have existed,'” he said.
Microsoft’s stance draws on a precedent from the Tom Kabinet ruling, which found that software resale was allowed but that e-books were different.
Microsoft is seeking to place its own products outside the rules that allowed secondary trading by making the interface distinct from software code.
The tribunal’s decision could determine whether Europe’s thriving trade in pre-owned software survives or vanishes entirely.
Via The Register[4]
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References
- ^ Microsoft (www.techradar.com)
- ^ ValueLicensing (www.valuelicensing.com)
- ^ going on for several years now (www.techradar.com)
- ^ The Register (www.theregister.com)