Monday, March 10, 2008

Hoist on their own Vista: internal Microsoft complaints support class action

The New York Times had an illuminating story about documents produced by Microsoft as part of the “Vista Capable” consumer class action, which I discussed here. The Times also provides a pdf of Microsoft’s internal emails and marketing notes. The contents exemplify why issues surrounding individual reliance should not routinely defeat consumer class actions: Microsoft intentionally modified its marketing campaign to convince more consumers to buy low-end machines that couldn’t run the full Vista program; it knew consumers would rely on the campaign and intended them to do so; consumers did what Microsoft expected. If we can presume confusion from intent to confuse in trademark cases, we should do the same for reliance in consumer protection class actions.

Randall Stross reconstructs the sequence of events as follows: Initially, Microsoft planned to say that only high-end, graphics-intensive PCs are “Vista Ready.” But then it dropped the graphics hardware requirement to avoid cutting into Windows XP sales on cheaper machines while people waited for Visa. As Stross recounts, “A semantic adjustment is made: Instead of saying that a PC is ‘Vista Ready,’ which might convey the idea that, well, it is ready to run Vista, a PC will be described as ‘Vista Capable,’ which supposedly signals that no promises are made about which version of Vista will actually work.” As the skeptical tone indicates, this was a sketchy endeavor from the start.

This marketing decision caused “considerable internal protest.” One program manager complained that “even a piece of junk will qualify.” “It will be a complete tragedy if we allowed it.”

Post-release, Microsoft received immediate blowback from consumers and marketing partners. Dell, for example, noted: “Customers did not understand what ‘Capable’ meant and expected more than could/would be delivered.”

Some highlights from the emails, as reported by Stross:

Then there’s Mike, who buys a laptop that has a reassuring “Windows Vista Capable” logo affixed. He thinks that he will be able to run Vista in all of its glory, as well as favorite Microsoft programs like Movie Maker. His report: “I personally got burned.” His new laptop — logo or no logo — lacks the necessary graphics chip and can run neither his favorite video-editing software nor anything but a hobbled version of Vista. “I now have a $2,100 e-mail machine,” he says.

It turns out that Mike is clearly not a naïf. He’s Mike Nash, a Microsoft vice president who oversees Windows product management. ….

[Microsoft’s] own staff tried to avert the coming deluge of customer complaints about underpowered machines. “It would be a lot less costly to do the right thing for the customer now,” said Robin Leonard, a Microsoft sales manager, in an e-mail message sent to her superiors, “than to spend dollars on the back end trying to fix the problem.”

I suppose that depends on how much you have to pay the lawyers.

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