Keep It or Delete It?: Pushmo (3DS eShop)
Keep It or Delete It?: Quasar Quinn: Escape from Zargnon (Android)
Keep It or Delete It?: Mutant Mudds (3DS eShop)
Final Cut: Hetalia: World Series (Season 3) (DVD)
Keep It or Delete It?: Paper Monsters (iPad)
So we have previously reported that Datel, the only 3rd party producer of memory units for the Xbox360 sued Microsoft for blocking the use of their device on the 360 console. Microsoft countered by asking the court to throw out the case based on the Apple Defense and the section of the EULA titled “Additional Terms and Conditions” that prohibits the use of unauthorized accessories. Microsoft was denied on 5 of the 6 charges Datel has brought against them. It was found that the “Additional Terms and Conditions” section was found to be ambiguous and vague by the court.
What I think will help the case most is the court found that while the Xbox Live terms prohibit unauthorized equipment (even if it was vaguely written) it is a separate agreement from the EULA that governs the use of machine.
The court found from the console EULA: “The software included in the Xbox product [Xbox 360 Video Game System or Xbox 360-compatible hardware accessories manufactured by or for Defendant whether included or purchased separately] is licensed to you, not sold. You are licensed to use such software only in your Xbox product and you may not reverse engineer it, except as expressly permitted by applicable law notwithstanding this limitation.” and from the Xbox Live EULA: customer “agree that you are using only authorized software and hardware to access the Service.” and later states that they can issue mandatory updates to enforce this clause.
In other words, while MS could potentially prohibit you from using unauthorized accessories if you use the LIVE service, their own EULA did not give them this power for those who do not use the service. But the dashboard update that disabled Datels cards was made mandatory to all users, even those who did not use nor agree to the EULA for LIVE. So the court found “Further, the Terms of Use could not have informed a customer’s purchasing decision because the Xbox Live is a separate optional service that a user may join after purchasing the Xbox 360.”
That would be the killer i think but then I am not a lawyer.
The six charges brought by Datel are:
- Violation of the Sherman Act: Monopolization and Attempted Monopolization of the Aftermarket for Xbox 360 Accessories and Add-ons
- Violation of the Sherman Act: Monopolization and Attempted Monopolization of the Multiplayer Online Dedicated Gaming Systems Market
- Violation of the Sherman Act and Clayton Act: tying arrangement
- Violation of California Business & Professions Code section 17200
- Common law unfair competition
- Intentional Interference with Prospective Economic Advantage.
Charge 2 was dismissed on the grounds of “lack of standing”, i.e. Datel does not make a console therefore it can’t sue MS for monopolizing the online console market, only Nintendo or Sony would have reasonable standing. The other charges were shown to have reasonable standing and will be allowed to continue.
Of course since the case was filed MS has updated their console to allow any usb drive to connect as a memory unit. It may seem like this would cause the case to be thrown out later but Datels memory units still appear to be on the banned list. And since they artificially limit the usable drives to 16GB I have a feeling that they will not be able to get the case dismissed later, and they will probably get sued over this artificial limit as well.
The full court brief can be found here.
See our all of our previous coverage of the Datel Vs. Microsoft Battle here.
Datel’s official announcement below
“DATEL’S ANTITRUST CLAIMS AGAINST MICROSOFT FOR MONOPOLIZATION OF XBOX 360 ACCESSORY MARKET MAY PROCEED”
“SAN FRANCISCO, CA – April 26, 2010. In a decision released April 23, 2010, the United States District Court in San Francisco rejected Microsoft’s motion to dismiss Datel’s lawsuit concerning monopolization of the Xbox 360 accessory market. The Court’s ruling permits Datel to proceed with five of the six claims it originally asserted.
“‘We’re gratified that the case will proceed and Datel looks forward to reestablishing the benefits of competition in the accessory market for all Xbox 360 users,’ said Daniel Asimow, a litigation director at San Francisco-based Howard Rice who argued the motion on Datel’s behalf.
“UK-based Datel is a leading manufacturer of video game accessories. Among Datel’s many innovative products are memory cards and controllers for the Xbox 360. Datel’s memory card, released in May 2009, offered four times the memory of Microsoft’s memory card accessories for the same or a lower price. Rather than responding with a better product or lower price, Microsoft instead deployed a mandatory November 2009 software update that disabled all memory cards over 512 megabytes (the largest size sold by Microsoft). This exclusionary act not only cut off the market for future Datel sales of memory cards but disabled Datel memory cards already sold. In addition, Microsoft arbitrarily altered its software authentication scheme for game controllers in an attempt to disable Datel’s competing products.
“On November 23, 2009 Datel sued Microsoft for antitrust violations. Microsoft responded with a motion to dismiss, claiming that because of a provision in a section entitled “Additional Terms and Conditions” buried in the product warranty, consumers agreed at the time of their Xbox purchase that they would not use unauthorized accessories.
“In its 31-page ruling, the Court rejected this argument, finding that those terms and conditions were at best ambiguous and did not support Microsoft’s contention. Indeed, if Microsoft’s reading were accepted, it would be impermissible to use the Xbox with a variety of accessories not manufactured by Microsoft, including televisions and music players. The Court rejected Microsoft’s reliance on Apple v. Psytar , in which Apple succeeded in dismissing antitrust claims based on a provision in the Mac OS user license restricting the use of the software to Apple computers. Unlike that case, here there is no clearly binding contractual restriction and it is not possible for a consumer to forecast all of his or her accessory needs at the time of the initial purchase.
“The Court also found that Datel had properly alleged claims against Microsoft for unfair competition and for unlawful tying of consoles to accessories and that Datel had properly alleged that Microsoft enjoys market power in the console market as well as the accessory market. The Court dismissed claims against Microsoft for monopolization of the console market, solely on the grounds that Datel, an accessory manufacturer, was not direct participant in the console market.”
