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Microsoft forbids class actions in new Windows licence

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Microsoft will make it harder for customers to club together with lawyers to file lawsuits against its products.

The company is rolling out new End User License Agreements (EULAs) that forbid punters from joining class-action proceedings.

Assistant general counsel Tim Fielden announced the tweak here and said the changes will come into effect as Microsoft releases major hardware or software updates.

The first big product to include the altered licence will be Windows 8: a release candidate is expected in June before it ships for PCs and tablets in late summer or the autumn.

Under the new licence, US consumers upset with Microsoft's products must pursue the company through a small-claims court or to arbitration. Where an arbitrator suggests damages greater than any settlement proposed by Microsoft, the company will pay whichever is largest: the higher damages or $1,000 for “most products and services”. Microsoft will also pay double the claimant’s fees.

Microsoft has already updated the Xbox Live EULA to rule out class-action suits.

Fielden said of the new policy: “This means customer complaints will be resolved promptly, and in those cases where the arbitrator agrees with the customer’s position, the customer will receive generous compensation, and receive it quickly.”

The change was shuffled out the door on the Friday before the long Memorial Day holiday weekend in the US.

Microsoft is capitalising on a 2011 US Supreme Court ruling that upheld a company's right to include a clause in a contract that prohibits customers from suing as part of a class action. The case had been brought against AT&T.

Class-action suits in US law are supposed to help individuals stand up to large companies, spreading the risk and costs of an action. Specialist attorneys are brought in to fight such cases. When individuals each bring the same action against a firm, attorneys will lobby the presiding judge to grant the case class-action status.

Microsoft has been on the sharp end of a number of such suits. Recent examples include the debacle over Microsoft allegedly misleading buyers by authorising PC makers to label computers as Vista “capable” when they could only run basic editions of the operating system.

Redmond has also been accused of misleading consumers by calling Windows Genuine Advantage (WGA) a critical security update when plaintiffs called it spyware. ®

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