Racketeering case against Microsoft, Best Buy revived
By
John Fontana
,
Network World
, 05/09/2007
- Share/Email
- Tweet This
- Print
Microsoft and Best Buy are facing racketeering charges in a case first brought seven years ago that alleged consumers had MSN accounts
activated and were charged for them without their knowledge when they purchased new PCs.
Last Friday, the 9th U.S. Circuit Court of Appeals in San Francisco reinstated the case, which accuses Microsoft and Best
Buy of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Allegation of RICO violations are typically seen in cases of organized crime, such as the conviction of mobster John Gotti.
Wall Street transgressions have been prosecuted under RICO, including the famous case of Michael Milken, the so-called “junk-bond
king,” who was indicted on 98 counts of racketeering and fraud in 1989.
In the Microsoft/Best Buy case, plaintiff James Odom complained that during the purchase of a new computer at Best Buy, he
was enrolled in a free-trial subscription to Microsoft’s MSN Internet service without his knowledge and then charged for the
service once the trial period had expired. He says other customers paying with credit or debit cards also were enrolled in
the same fashion.
Odom charged the pair violated RICO in part because of an agreement under which “Microsoft invested $200 million in Best Buy
and agreed to promote Best Buy’s online store through its MSN service.” In return, “Best Buy agreed to promote MSN service
and other Microsoft products in its stores and advertising.” The agreement, Odom alleged, led to the MSN enrollment issue.
“We conclude that plaintiffs have alleged facts that, if proved, provide sufficient ‘evidence that the various associates
function as a continuing unit,’” the court wrote in its findings. The “continuing” ruling means the behavior by Microsoft
and Best Buy was “ongoing” and not an isolated incident. The court also wrote that if the allegations are true that they establish
that the pair shared a common purpose to increase MSN subscribers through “fraudulent means.”
The Seattle Post-Intelligencer has posted a copy of the ruling.
Microsoft officials told Bloomberg News that the Circuit Court’s ruling was “procedural” and did not reflect on the merits
of the case. The paper reported the MSN subscription program at Best Buy concluded in 2003 when Microsoft began to offer refunds
to customers.
The case will head to the U.S. District Court in Seattle.
Partner Content
Blue Stripe Software
www.bluestripe.com/
Improving Application Performance Troubleshooting
Diagnosing why an application is slow is hard, at times taking days or weeks to isolate and resolve. This paper explains the challenges involved using current management tools, provides a 'wish list' for application management and analysis, and explains the need for an application system-wide approach that monitors entire applications, not components.
Download Whitepaper
Virtual Vigilance: Managing Application Performance in Virtual Environments
This paper highlights the impact of virtualization on application performance. "Managing Application Performance in Virtual Environments" states: "Best-in-Class organizations are predominately taking actions around improving visibility across both physical and virtual systems, assessing the business impact of application performance and understanding interdependencies of applications in virtualized environments."
Download Whitepaper
Application Service Requests: The Missing Link for Pragmatic ITSM
Forrester Research analyst Glenn O'Donnell and BlueStripe co-founder Vic Nyman discuss a breakthrough approach to application problem management. Learn the new approach for ITSM problem management, which provides: Rapid isolation of application slow-downs to specific components for quick problem resolution, 24/7 monitoring for proactive notification of potential issues before end users are impacted and much more.
Register for Webcast
Comments (1)
Racketeering case against Microsoft, Best Buy revivedBy Microsoft Subnet on May 9, 2007, 6:10 pmMicrosoft and Best Buy are facing racketeering charges in a case first brought seven years ago that alleged consumers had MSN accounts activated and were charged...
Reply | Read entire comment
View all comments