You Can’t Legally Join A Class-Action Lawsuit Against Microsoft, But You Can Against Apple (For Now)

You Can’t Legally Join A Class-Action Lawsuit Against Microsoft, But You Can Against Apple (For Now)

Microsoft plans to use license agreements to prevent class action lawsuits

Microsoft is a company known for creating strict, labyrinthine, costly terms in its commercial and end-user licensing. With Windows 8 seen as a make-or-break product for Microsoft, the company has already been adding licensing terms intended to strengthen its hand in the mobile market. As we reported earlier this year, Microsoft’s enterprise licensing for Windows 8 has provisions to coerce businesses into buying ARM-based Windows RT tablets while punishing those that deploy iPads with more costly terms.

Ratcheting things up a notch, Microsoft’s general counsel Tim Fielden announced new details about the company’s end-user license agreements. Although not mentioning specific products or services, Fielden posted on a Microsoft blog that many new agreements will prohibit users from initiating a class action lawsuit against the company.

Under the new terms, users will be able to request arbitration or sue Microsoft only in small claims court cases – both of those options prevent large numbers of users from joining a single case against the company and suing on their own behalf as well as on the behalf of other users of the same product or service. It’s likely, although not confirmed, that customers seeking arbitration and settlement will end up with a nondisclosure clause in their settlement that prevents them from discussing the original issue or the outcome of the case.

Essentially, the move prevents Microsoft from taking a serious hit to its pocketbook or reputation.

The U.S. Supreme Court ruled last year that companies can enshrine such restrictions in their EULAs and other agreements. Microsoft can also require users to accept a new agreement if they want to keep using a product or service, a tactic it took with an update to the Xbox EULA.

How does Apple compare to Microsoft in this situation? To date the company hasn’t added such a provision to any EULA agreements (neither has Google according to Geekwire).

Apple has generally avoided the kinds byzantine license requirements that Microsoft uses – particularly for business and enterprise products. Apple’s OS X Server licensing, for example, has always been straightforward and hasn’t required per-seat or per-user client access licensing – meaning as many people as you like can access a Mac server at no additional costs. Similarly, licensing for Apple Remote Desktop is per console (the Mac onto which the software is installed) allowing it to manage an unlimited number of Macs.

In addition to generous licensing terms, Apple also charge significantly less for new versions of OS X and OS X Server. Snow Leopard and Lion each shipped for $29.99 and Mountain Lion is excepted to ship for a similar price. Lion Server is available for $49.99. That’s a significant difference from the range of $119.99 to $219.99 range for Windows 7 (to say nothing about Windows Server and Exchange).

It is, however, worth noting that all four national wireless carriers, including those that offer the iPhone and iPad, have added such provisions to their user contracts to prohibit class action suits. Of course, there’s also no guarantee this practice won’t become a tech industry standard or that Apple won’t adopt similar measures at some point in the future.

  • Will Swigart

    Seems to me that we citizens and end users might want to consider legal action to disallow this practice. Meaning we either get our legislators to enact law that would do so or we take action via initiative to do so. 

  • LDMartin1959

    many new agreements will prohibit users from initiating a class action lawsuit against the company…”


    IAMAL, but I think that will get them sued since I don’t think you can contractually prohibit someone from exercising their legal rights.

About the author

Ryan FaasRyan Faas is a technology journalist and consultant living in upstate New York who has written extensively about Apple, business and enterprise IT, and the mobile industry. In addition to writing for Cult of Mac, he is a contributor to Computerworld, InformIT, and Peachpit Press. In a previous existence he was a healthcare IT director as well as a systems and network administrator. Follow Ryan on Twitter and Google +

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