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