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  Microsoft Files To Dismiss Datel Case, Points To Mac OSX Precedent
by Leigh Alexander [PC, Console/PC]
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January 26, 2010
 
Microsoft Files To Dismiss Datel Case, Points To Mac OSX Precedent

Microsoft has filed a motion to dismiss the antitrust suit brought against it by memory card maker Datel, who's alleging that the Xbox 360's recent lock-out of third-party storage devices deliberately harms competition.

Interestingly, according to a TechFlash report, the company's motion (PDF link), Microsoft is relying on a precedent set by Apple to make a case in its favor.

Last year, Apple was able to stop computer-maker PsyStar from manufacturing machines that ran Mac OSX without Apple's authorization, and prevailed when PsyStar alleged antitrust. Just as the court determined only Apple devices can run Apple operating systems, Microsoft says, Xbox 360 consoles must use first-party accessories.

Microsoft also takes issue with Datel's definition of the field in which it claims anti-competition -- "Multiplayer Online Dedicated Gaming Systems" -- in which it only includes Xbox 360 and PlayStation 3, not Nintendo's Wii or any portable game console.

As the Wii has outsold both consoles, any antitrust claims would certainly be weakened by acknowledging Nintendo's console, so Microsoft is arguing for its inclusion in the category as part of the motion.

"Datel’s monopolization theory depends on excluding from the relevant market numerous products that fit Datel’s own definition, such as the Nintendo Wii, the Nintendo DS, the Sony PSP, and the Sony PlayStation 2 — all multiplayer online dedicated gaming systems," says the company in its motion. "Many of these products have outsold the Xbox 360."

Microsoft removed support for third-party memory cards with an Xbox 360 software update in October 2009. Datel's original suit claims it was told the "disabling of third-party memory units was an unintentional effect".

Microsoft later told media outlets that it implemented the lockout to prevent cheaters, and to maintain tighter control over compatibility, safety and compliance, something its dismissal motion continues to argue it has the right to do.
 
   
 
Comments

Ephriam Knight
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Apple does not make a good comparison in this case.

Apple does not allow their OS to run on any machines other than the ones they authorize. But they do allow any 3rd party accessory maker to create accessories for their machines. Meaning anyone that wants to make a printer, mouse, keyboard, USB drive, monitor, camera etc, that is compatible with a Mac Computer they can. They do not have to get express permission or licensing from Apple.

Datel is not making a 3rd party console here that plays 360 games. They are making an accessory. An accessory that they are arguing should be allowed to exist and not be blocked from the console.

I can't fathom how Microsoft's legal team made that connection.

Chris Kaminari
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I think its pretty stupid of them to block out third party devices.
They try and use the Wii as a comparison...pathetic. How many accessory have they made for the Wii, and how many of them are actual memory specific accessory's? On a Wii, you can use any SD card, even Micro SD's, on a Wii for storage, and you dont see nintendo blocking out everything BUT Nintendo specific SD cards.
These memory cards are cheap too, so it helps anyone that wants to game on a budget, or moves there saves and profiles from console to console for any reason.
The Apple case I think is a bad example, considering really anyone that goes against Apple will get there faces stomped in, because of all there damn money.
I wish we could all just get along hahaha.

Ephriam Knight
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I want to comment on this one as well:
"Datel’s monopolization theory depends on excluding from the relevant market numerous products that fit Datel’s own definition, such as the Nintendo Wii, the Nintendo DS, the Sony PSP, and the Sony PlayStation 2 — all multiplayer online dedicated gaming systems," says the company in its motion. "Many of these products have outsold the Xbox 360."

Basically, Microsoft is saying that Datel cannot use their monopolization theory because they are not the only console in town. Too bad for Microsoft that is not Datel's argument.

Datel is talking about a very narrow market here: Memory cards for the Xbox 360. By using software to block 3rd party memory cards, Microsoft has created a monopoly in that market where only Microsoft can create and sell.

That is their argument.

Jerome Russ
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Ephriam, I think your sentence alone backs up Microsofts claim. "But they do allow any..."

It's their product, why can't they control how it is used? It's like everyone is ok with software being locked (DRM anyone?) but not hardware?

Fiore Iantosca
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I really Microsoft would come out with larger capacity memory sticks AND make them reasonable.

Ephriam Knight
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@Jerome,

how exactly does that back up Microsoft's claim? I don't follow.

as for this:
"It's their product, why can't they control how it is used?"

Actually, it is my 360. I bought it. I own it. Microsoft only manufactured it. It is no longer their hardware once it is in my hands.

Do you honestly think that the US FTC would sit idly by and allow any company to lock out competitors in accessory markets? Do you think that the FTC would allow Ford to block any replacement parts that are not manufactured by Ford from working with their cars?

The issue goes back to my original point. Microsoft is arguing a completely unrelated point from the one Datel is arguing.

Jonathan Arsenault
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The only way they could have pull this off is if they patented the plug used by those card (it's only a bastard usb plug...) IANAL so correct me if i am wrong, but this would probably allow them to hit them with a patent infringement counter-claim. But the fact they called precedence on a totally unrelated case would suggest this is nothing more but scare tactic, typical Microsoft really, someone can remind them that this is America, someone made a cheaper and better product it's the whole point of competitive business.

Mark Harris
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Ephriam, in the same manner once you buy OSX it ceases to be Apple's product and becomes yours, yet they don't allow or support your installation of that OS on non-Apple hardware. One side is controlling how they want their software handled, the other side their hardware. That's beside the fact that if you use any form of Xbox Live then you have an ongoing contract with MS that may or may not effect them. I don't agree with MS on this one, but they have a point. If you're going to allow certain companies to restrict who/what/how other products interact with theirs, then you should provide all companies with that latitude.

edit : spelling nazi

Adam Whitmore
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@Mark
Actually you do not own the software. You purchase a license, and agree with the EULA and get to use the software the way the EULA has specified.

@Jerome
Check the Xbox 360 manual and agreement. I know third party products void waranties, not sure if they have a TOS. This reminds me of the Itunes/palm debacle.

@Ephriam
You may own the hardware, but you do not own the software. Microsoft may be able to get away with what they are doing because it was a software update. Like that cat and mouse game of Itunes/Palm. If they redesigned the hardware it may be a different story. Also, do you remember Trusted Platform Module?


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