Microsoft NZ hit with Commerce Commission complaint

Auckland firm Infraserv has complained about Microsoft Corp. to the Commerce Commission, alleging anticompetitive behaviour.

Infraserv, the operations arm of law firm Clendon Feeney, laid the complaint last week.

The complaint asks the commission to investigate Microsoft on the grounds that its conduct demonstrates a major market problem and disregards New Zealand law (the Fair Trading Act and Commerce Act), and that the case is important to the national interest in competition in trade.

The complaint was spurred by Microsoft’s changes to its licensing model and the introduction of a licensing program called Software Assurance.

Software Assurance requires customers to pay two years in advance for the right to any Microsoft software upgrades. This is regardless of whether or not Microsoft releases any upgrade within those two years. In the past, customers have bought upgrades as they required them.

Clendon Feeney partner Craig Horrocks, who is also a Computerworld contributor, believes Software Assurance is “a mistake” and the firm, a Microsoft customer since 1990, filed the complaint because “it will affect anyone with more than a few licences of Microsoft products.”

“Locking a customer into a two-year guaranteed income stream is much better than being reliant on customers deciding that an upgrade is good value before they spend their money. Being paid and not having to deliver anything is even better,” says Horrocks.

“What other supplier in the world, other than possibly government through taxation, can ask you to pay for something which is not defined and if nothing is delivered still claims you receive a benefit?”

He says Software Assurance does not deliver software upgrades with certainty. “There are no service levels, there are no minimum deliverables, in fact Software Assurance promises nothing other than that the customer has the right to upgrade, if Microsoft releases any upgrade.”

The Commerce Commission has confirmed that it has received what it terms an “inquiry”, which will be assessed to see whether it will be treated as a complaint.

Commerce Commission spokeswoman Jackie Maitland says the commission will have a better idea of how long the inquiry will take this week.