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Microsoft Sued for Locking Out Third Party Memory Cards

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Nobel Laureate
Posts: 15810
Joined: 31 Dec 2008

Avykins:
Okay so before I start I must explain. I personally hate this shit. I do think MS are just being assholes for locking out memory cards and 3rd party harddrives too.
However. The 360 is their property right? So if they want to lock out shit that others are making for their product should they not legally be able to?
Is Datel paying them a percentage for sales of their items which is clearly designed for MS's product?
Basically what I am saying is that datel is making money only because of the 360. Why should they be able to get away with that without at least having to pay something to MS?

QFT

Either way, this will just be settled and will hardly be a blow to microsoft at all.

Paperboy
Posts: 50
Joined: 21 Oct 2008

Greg Tito:
Microsoft Sued for Locking Out Third Party Memory Cards

image

Microsoft accused of being anti-competitive, that's unpossible!

During the last Xbox 360 Dashboard update on November 17, Microsoft introduced code which disallowed third party memory card units to function in their consoles, such as those sold by Datel. Today, Datel announced that it is suing Microsoft for unlawfully reducing competition in the memory card market.

In a press release from the firm Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Datel's attorney Marty Glick stated:

Microsoft has taken steps to render inoperable the competing Datel memory card for no visible purpose other than to have that market entirely to themselves. They accomplished their recent update by making a system change that will not recognize or allow operation of a memory card with greater capacity than their own. We believe that with the power Microsoft enjoys in the market for Xbox accessories this conduct is unlawful.

It is now up to a federal court in San Francisco to determine whether Microsoft was indeed engaging in anti-competitive practices.

Datel memory cards had capacities up to 4 gb, whereas the biggest Microsoft cards are stalled at 512mb. Datel says that this lawsuit is in the best interests of the consumer, and I have to agree. More choice is generally good, especially if you don't provide a product that your competitor does.

Source: via Joystiq

Permalink

JESUS. Christ, this is a horrid story. WHY DATEL WHY

Beat Writer
Posts: 212
Joined: 1 Nov 2009

Why would Microsoft do this? Do they really need the extra money from memory card sales?

Infamous Scribbler
Posts: 513
Joined: 25 Mar 2009

They've done what? i keep pretty much my entire profile data on 4gb cards due to the fact that i dont currently have my own 360 and often go round mate places to play

Gone Gonzo
Posts: 2393
Joined: 10 Nov 2008

I don't see how it's unlawful. It's their hardware and they can do what they want with it really.

Infamous Scribbler
Posts: 638
Joined: 15 Jan 2009

so I'm guessing that all the commentors here are too young to remember when United States v. Microsoft, antitrust case

It ended with Microsoft being forced to stop making their operating systems that made it difficult for the competition to get in the market. Like making it difficult for users to use competition programs on their OS.

I'd bet Datel will win this one.

On the Record
Posts: 6496
Joined: 16 Dec 2008

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

Monkeys or no deal!

I'm not one of those people who always hates on Microsoft, but come on! This is so scummy, so low down, and such a dirty move on their part. Banning third party memory cards because they are bigger and better? Beyond scummy.

Muckraker
Posts: 292
Joined: 20 Oct 2009

Well technically its their product they can change the console`s specifications as much as they want. . .. But yes viewing this as a ban of better product. . . and not just a lil bit but seriously over-powered card then it is a weird move :O
But honestly ppl just cant deal with their competition. Im sure the ppl who are suing McSoft now would if the oppurtunity arises do the same for some product of their own. Nobody likes competition in any sphere of bussiness. I mean i may be selling lemonade in the park and if i see another dude selling i wont be happy. And if he has better lemonade then i think we might even refer to the Street Fighting that was mentioned above :D

Copy Clerk
Posts: 63
Joined: 14 Jun 2008

Dirty Apple:
I'll be interested to find out how this turns out. I'm not sure what copyright and IP law says, but you'd think that since its their own proprietary system that they can decide what works with it and what doesn't. Please correct me if my asumption is way off.

Nice reply. Also you provide a interesting view on this debate.

Xbox 360 (and their memory cards) are not really the open form factor everyone think it is.
Xbox 360 memory cards are not the same form factor category as SATA, USB, Firewire and other computer port technology.

Paperboy
Posts: 28
Joined: 13 Dec 2008

It doesn't have anything to do with memory card competition or size imo. It has to do with piracy and Datel making it easier. And selling more memory units because of it. It doesn't take too much thought or research to find out the "why" of the MS decision. Datel memory units allow interface between PCs and 360s. Datel had to know it was coming, MS didn't just do this out of the blue, they complained to Datel first. Notice MS isn't whining about other peripherals...

http://www.ripten.com/2009/05/18/datels-xbox-360-memory-card-supports-16gb-microsdsdhc-cards/

Gone Gonzo
Posts: 1156
Joined: 24 Mar 2009

shewolf51:

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

With knives?

Memory sticks.

This will be interesting to see how it plays out. For one, Microsoft has the argument that the Xbox is their property, therefore they can pick what gets used with it. But on the other, Microsoft does not hold the patent on flash technology, therefore they are being anticompetitive with this action. It's practically a coin toss, but it may very well affect how third party media is produced for consoles down the road on how this gets determined. (Unless Microsoft pulls a hostile takeover of Datel and therefore renders the lawsuit moot, which would be in their nature, but might not be in their budget atm.)

Infamous Scribbler
Posts: 694
Joined: 16 Mar 2008

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

I thought a gentlemanly duel would be more appropriate.

Gone Gonzo
Posts: 1156
Joined: 24 Mar 2009

SomeUnregPunk:
so I'm guessing that all the commentors here are too young to remember when United States v. Microsoft, antitrust case

It ended with Microsoft being forced to stop making their operating systems that made it difficult for the competition to get in the market. Like making it difficult for users to use competition programs on their OS.

I'd bet Datel will win this one.

That case is a different ballgame. In this one where the 360 is concerned, Microsoft owns the OS and the console it operates on, so it has a more legit say about what gets used on it. PC's are such an open domain, not even produced by Microsoft at all, that it would be a trust issue with Microsoft playing playground bully.
For analogy:
-You want to play on a public sandlot, but some guy there wants to tell you how it wants you to play. That's the case with their infringement on PC's.
-You want to play on a private ballfield, but the owner won't let you bring your own wood bats with you, instead selling you his aluminum ones to use. That's this case with the 360.

Microsoft is still playing big bully on this one, but Datel doesn't really have much hope.

Gone Gonzo
Posts: 2746
Joined: 25 Jul 2009

When someone does something better than you, be a bitch about it.

Gone Gonzo
Posts: 4184
Joined: 29 Dec 2007

Avykins:
Okay so before I start I must explain. I personally hate this shit. I do think MS are just being assholes for locking out memory cards and 3rd party harddrives too.
However. The 360 is their property right? So if they want to lock out shit that others are making for their product should they not legally be able to?
Is Datel paying them a percentage for sales of their items which is clearly designed for MS's product?
Basically what I am saying is that datel is making money only because of the 360. Why should they be able to get away with that without at least having to pay something to MS?

I'm fairly sure that monopolies are a bad thing, what with the whole Sherman Antitrust Act http://en.wikipedia.org/wiki/Sherman_Antitrust_Act.
I'm not a lawyer, but I don't see how Microsoft will get around the whole "monopolies are illegal" part, which is what MS has here.

If I build a house and sell it to you, do I have the right to decide over every item you put in that house?

Gone Gonzo
Posts: 2346
Joined: 27 Dec 2008

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

Or...

THUNDERDOME

TWO MEN ENTER ONE MAN LEAVES

Copy Clerk
Posts: 53
Joined: 19 Mar 2009

*Should* MS allow third party hardware?
Yes.

Do they *have* to?
No, likely not. They don't have a monopoly as they do with Windows, and it is their closed platform.

That being said, the money in consoles is in the accessories. Anytime another company gets a sale, that's cash out of MS' pocket *unless* they've paid a licensing fee to MS. I'd be willing to be that they come to some sort of licensing agreement with Datel in the near future - old cards will still be locked out, but new ones will be introduced - for just a bit more then they were before.

Gone Gonzo
Posts: 1609
Joined: 25 Jul 2008

A San Fransico court?

Microsoft might as well settle right now, they don't stand a chance in hippie-ville who just love to fuck over big corporations.

I hope this has global effects as if memory cards open up, how long till I can buy an Xbox 360 hard drive for competitive prices like I can for my PS3?

Then again, I'm a long way from filling my 360's HDD and the only console HDD I see filling up quickly is my PS3 due to my soon to arrive PlayTV adaptor which turns my PS3 into a rather effective PVR, to record hours and hours of broadcast TV now that would need a 500GB HDD.

But there are very few movies worth downloading to keep on 360, 60GB is about good enough for me right now.

On the Record
Posts: 6426
Joined: 7 Mar 2008

Chrissyluky:
this hardly suprises me. microsoft has been convicted of being a monopoly before.

there i fixed that for you, they've already been convicted of it, they were almost carved up into 3 different companies but then Bush Jr got into power and he stopped everything good that could have come from that decision

SantoUno:

Filtertip:
I din't even know about these memery cards till just now well done microsoft your blocking has lead its way to informing me of a possablely better product and i hate you for blocking it.

While theres FAR to much sueing going on atm i can back this one since microsoft are to lazy to fight them so they just remove them.

I feel the same, I had no idea third-party 360 memory cards existed, and I can't believe they can hold so much space. Wow shame on you Microsoft, this is a product that I might have been interested in buying and now you're denying me the right to use it? For shame you tyrannical fucks.

they did say they were going to do this several months ago. it's rather stupid that they did it and i hope they lose badly in court

the funny thing is after them behaving like this time and time again people still go out and buy their consoles. if you want them to NOT do this DON'T BUY THEIR CONSOLES and if you do have a 360, go sell it and get something else. it's as simple as that.

Press Junketeer
Posts: 464
Joined: 5 Sep 2009

Look, I get the whole anti-piracy thing is a big deal for companies and all that, but let's face it: Microsoft has been going after a fly with a rocket launcher.

This is hardly a targeted approach. With all the collateral damage that their update has been causing, it's not excusable. After all, you can't argue that you're "just defending your company" if you end up hurting/putting out of business other firms altogether.

Gone Gonzo
Posts: 1609
Joined: 25 Jul 2008

Avykins:
Okay so before I start I must explain. I personally hate this shit. I do think MS are just being assholes for locking out memory cards and 3rd party harddrives too.
However. The 360 is their property right? So if they want to lock out shit that others are making for their product should they not legally be able to?
Is Datel paying them a percentage for sales of their items which is clearly designed for MS's product?
Basically what I am saying is that datel is making money only because of the 360. Why should they be able to get away with that without at least having to pay something to MS?

It was THEIR product until they sold it to me. I didn't rent it, I don't have to return it after a certain period, it is MINE. Copyright and patent laws stop me duplicating it but shouldn't stop me doing anything to it.

Now a service like XBL does have reasonable and legal terms of service, but something like memory capacity has nothing directly to do with the proper running of XBL so they have no justification to ban them for using Datel memory cards or anything else.

Gone Gonzo
Posts: 1928
Joined: 13 Aug 2009

cleverlymadeup:

SantoUno:

Filtertip:
I din't even know about these memery cards till just now well done microsoft your blocking has lead its way to informing me of a possablely better product and i hate you for blocking it.

While theres FAR to much sueing going on atm i can back this one since microsoft are to lazy to fight them so they just remove them.

I feel the same, I had no idea third-party 360 memory cards existed, and I can't believe they can hold so much space. Wow shame on you Microsoft, this is a product that I might have been interested in buying and now you're denying me the right to use it? For shame you tyrannical fucks.

they did say they were going to do this several months ago. it's rather stupid that they did it and i hope they lose badly in court

the funny thing is after them behaving like this time and time again people still go out and buy their consoles. if you want them to NOT do this DON'T BUY THEIR CONSOLES and if you do have a 360, go sell it and get something else. it's as simple as that.

Well that's a bit uncalled for because many people like me still enjoy the 360, something like this shouldn't make us toss is out, their customers just need to demand fair treatment, which may sound impossible but even if we have a choice to not own theiur product their customers still have rights because they are loyal customers and bought the 360.

Paperboy
Posts: 26
Joined: 26 Jun 2008

Treblaine:
It was THEIR product until they sold it to me. I didn't rent it, I don't have to return it after a certain period, it is MINE. Copyright and patent laws stop me duplicating it but shouldn't stop me doing anything to it.

Now a service like XBL does have reasonable and legal terms of service, but something like memory capacity has nothing directly to do with the proper running of XBL so they have no justification to ban them for using Datel memory cards or anything else.

The main reason Microsoft didn't like it was because it made it incredibly easy to edit game saves, ie. cheating which is a part of XBL's ToS. If Datel made large memory cards without the removable disk, I don't think there would've been an issue.

Gone Gonzo
Posts: 1755
Joined: 12 May 2009

Only makes Sony look better imo, with them reportedly reaching out to Mozilla for Firefox on the PS3, as well as being open to 3rd party HDD's and other external memory types. The PS3 is becoming a friendlier prospect to more and more. Hell, Sony doesn't really even need to push PR, MS is doing it for them.

Infamous Scribbler
Posts: 649
Joined: 29 Oct 2009

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

prison fight with a shank made from your toothbrush.

Copy Clerk
Posts: 107
Joined: 4 Feb 2008

Greg Tito:
Today, Datel announced that it is suing Microsoft for unlawfully reducing competition in the memory card market.

That's rich coming from a company that has enjoyed years of making numerous peripherals off several systems without paying any of their owners a dime.

And it's only the memory card market on the 360. And I've been using my 4Gb USB stick to play various media without a single problem (couple of TV shows and a movie).

Wofiel:

hebdomad:
However I think Microsoft should allow for third party accessory's.

They do; there's the controllers, battery pack kits, media remotes, steering wheels, arcade sticks, hard drives, faceplates and more.

Less jumping to conclusions people.

I second this motion (less jumping to conclusions)!

BANNED
Posts: 3752
Joined: 8 May 2008

Treblaine:
It was THEIR product until they sold it to me. I didn't rent it, I don't have to return it after a certain period, it is MINE. Copyright and patent laws stop me duplicating it but shouldn't stop me doing anything to it.

Now a service like XBL does have reasonable and legal terms of service, but something like memory capacity has nothing directly to do with the proper running of XBL so they have no justification to ban them for using Datel memory cards or anything else.

You have use of the 360 as is. You do not have the right to mod it. If you do they can ban you from their services. Same as if you mod it in any way you void your warranty. It is all in the eula hence why modders are now banned from XBL. Also you are not making money off it. That is why people can make free fan mods and get away with it under fair use. If you try to sell a fan mod then companies can sue the crap out of you.
Datel is making money off of another companies item without written permission.
They do not stand a chance in this lawsuit.

Copy Clerk
Posts: 74
Joined: 3 Oct 2008

The really funny thing is that they could have handled this in a completely legitimate, "excusable" manner that would have held up just fine in an anti-trust court. They could have simply updated it to USE no more than 512mb on any memory stick present in the system, regardless of its maximum capacity. They could easily chalk that up to compatibility/testing limitations and concerns, while simultaneously making it pointless to buy a Datel memory stick without having to outright block it.

I mean, geez, at least be smart about it.

Gone Gonzo
Posts: 1609
Joined: 25 Jul 2008

Avykins:

Treblaine:
It was THEIR product until they sold it to me. I didn't rent it, I don't have to return it after a certain period, it is MINE. Copyright and patent laws stop me duplicating it but shouldn't stop me doing anything to it.

Now a service like XBL does have reasonable and legal terms of service, but something like memory capacity has nothing directly to do with the proper running of XBL so they have no justification to ban them for using Datel memory cards or anything else.

You have use of the 360 as is. You do not have the right to mod it. If you do they can ban you from their services. Same as if you mod it in any way you void your warranty. It is all in the eula hence why modders are now banned from XBL. Also you are not making money off it. That is why people can make free fan mods and get away with it under fair use. If you try to sell a fan mod then companies can sue the crap out of you.
Datel is making money off of another companies item without written permission.
They do not stand a chance in this lawsuit.

We all have the right to mod it. That may exclude one from XBL Gold but due to the cheating aspect but Silver exclusion should only happen if Microsoft is being defrauded of thier digital sales (NOT fair use). Which I don't believe is the case. Though Microsoft has it's way of dealing with modders like having new games only playable on the latest console firmware update, an update that bricks modded consoles... until a cracked mod is made as we see with the software arms race on the hacked PSP platform and new updates from Sony.

But this isn't even about modding, this is about about an accessory. I have in fact seen third party accessories for the 360 sold all over the place because they in and of them self are NOT illegal.

I mean when in the hell as it EVER been illegal to "make money off of another companies (sic) item"? You mean I can't sell a hands-free mobile-phone cradle for a car unless I get permission and pay a fee to every single car manufacturer?

This is a free economy, I can do whatever is possible! The legal limits are ENTIRELY on the host platform to prevent monopolistic practices.

Of course this is only hardware, software goes into the area of copyright which is far more rigid. For example, it is my understanding there is code on the Xbox 360 hard-drive to allow it to interface with the 360. The hardware is easy and legal to duplicate and even enhance, but the software is copyrighted up the yah-zoo which is why unless there is some sort of special legal ruling it really is impossible for third party 360 Hard Drives to be sold simply for the software on them that is required.

I don't believe the same software limits apply to their Memory cards.

Datel are perfectly within their legal rights to sell accessories for the 360 and they don't have to pay a penny to Microsoft. The removable memory doesn't facilitate cheating as a 360 memory->USB adapter will allow the same saves to be edited. But that is only for increasing your gamerscore... which is lame. I see my achievements as personal victories, faking them has to be ultimate fail. Higher gamerscore earns you NOTHING, only bragging rights and is not anti-competitive for online games.

See, it's just not like the good-old-days when consoles where mostly offline with no patches or firmware updates, now hardware/firmware modding is a constant struggle between the hackers and the corporations.

And there is nothing illegal about hacking a PSP or DS so that you can emulate PC games like Quake, games that you legally own. Fair use, baby! Terms of service are JUST for service. Breaching TOS is NOT ILLEGAL and does NOT void your right of ownership, only voids any responsibility the manufacturer has to provide you service like XBL.

However, Microsoft has crossed a line here as they are not just raining on a Hackers party, they are locking out legitimate businesses as this case is entirely about sales to the "good" console owners who are running the latest firmware and obeying the Terms of Service. That IS anti-competitive, even if they were within the law in all the little steps up to that point.

Gone Gonzo
Posts: 2055
Joined: 2 Nov 2008

Whether or not I like or approve of Microsoft's lockout on non-MS memory cards is beside the point; though I will say that I disagree w/ it.

However, is it unlawful? No. If the court decides that it is, then I'll just chalk that up on my "Disappointed in Humanity" column next to the nearly empty "Times Common Sense Prevailed."

Paperboy
Posts: 20
Joined: 23 Sep 2009

its dissapointing that microsoft is banning the hardware its really anti competitive

Press Junketeer
Posts: 492
Joined: 11 Feb 2009

I'm with Microsoft on this all the way. Especially if what Wofiel says about this case is true.
And I bet it is.
If Datel still wants to earn money on the Xbox, I bet all they need to do is to remove the part of their memory cards which makes it work on a computer. Make them identical in use to the ones Microsoft makes themselves, just with a larger capacity. I bet that would fly well with Microsoft, and they would probably make them work again.

But even if they didn't this is fully OK. I hope Microsoft wins the case.
And this is not because I am a massive Microsoft fanboy or something. I just view this as it is. Microsoft have the right to do this. And they should, especially if the cards help piracy and cheating.

Gone Gonzo
Posts: 1585
Joined: 27 Jul 2008

Sparrow:
Man, is this Lawsuit November or something? Can't people learn to solve their differences the proper way?

Like, a street fight?

Hardly a better solution, even if you were being sarcastic.

Gone Gonzo
Posts: 3545
Joined: 7 Oct 2008

Microsoft was founded on the idea that if you create something, you can be the sole vendor of that thing for as long as possible and have a near-perfect monopoly.

Now they are just expanding that to cover other electronic devices. What's the big surprise?

It's well-known that third-party cards usually suck, but most other game companies at least allow (tolerate) off-brand companies to develop alternatives for the customer. I don't see how keeping a third-party company from making memory cards affects piracy in ANY way (modders or pirates will use hard drives and writable discs instead of memory cards, anyhow), but this absolutely affects M$' ability to squeeze every last dollar out the consumer by forcing them to shop for cards at Microsoft and nowhere else.

Gone Gonzo
Posts: 3545
Joined: 7 Oct 2008

Avykins:

Treblaine:
It was THEIR product until they sold it to me. I didn't rent it, I don't have to return it after a certain period, it is MINE. Copyright and patent laws stop me duplicating it but shouldn't stop me doing anything to it.

Now a service like XBL does have reasonable and legal terms of service, but something like memory capacity has nothing directly to do with the proper running of XBL so they have no justification to ban them for using Datel memory cards or anything else.

You have use of the 360 as is. You do not have the right to mod it. If you do they can ban you from their services. Same as if you mod it in any way you void your warranty. It is all in the eula hence why modders are now banned from XBL. Also you are not making money off it. That is why people can make free fan mods and get away with it under fair use. If you try to sell a fan mod then companies can sue the crap out of you.
Datel is making money off of another companies item without written permission.
They do not stand a chance in this lawsuit.

Maybe not, but there's been an unspoken agreement for years now that companies like Datel can make accessories for systems they don't own. None of the main video game companies seem to openly endorse this, but up until now I hadn't heard of any of them being strictly against it. I mean, goodness sakes, I've seen 3rd-party memory cards around since the birth of memory cards themselves!

It's sort of like if all of a sudden anyone who went a mile over the speed limit or jaywalked got a ticket. It's technically illegal, but people have been doing it for years and it's totally commonplace.

Legally they might be in the wrong, but third-party support seems pretty essential (to me) in keeping a system alive. All those useless system decoration options and pointless crap keep shallow people paying attention to the console, and if a company refuses to provide a decent-sized memory card, they should have the decency to allow somebody else to make it and simply charge a small fee.

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