July 26, 2016

The floodgates are definitely open

We all knew that Microsoft's GWX lawsuit woes weren't going to end with one travel agent in Sausalito. It really was just a matter of time until the class action floodgates opened; the question was not if? but when? and the answer, apparently, is now.

From the Seattle Times:
Microsoft is facing two lawsuits seeking class-action status related to the company’s campaign to get people to use Windows 10.
Three Florida men sued Microsoft in U.S. District Court in Florida on Friday, saying Microsoft’s Windows 10 update prompts violated laws governing unsolicited electronic advertisements, as well as Federal Trade Commission prohibitions on deceptive and unfair practices.
Microsoft was also sued last month in district court in Haifa, Israel. That suit, which is also seeking class-action status, alleges Windows 10 installed on Windows users’ computers without their consent. That, the suit alleges, violates Israeli computer law.
Microsoft responded with the normal boilerplate legal-speak (“we believe the plaintiffs’ claims are without merit and we are confident we’ll be successful in court”) that corporations use whenever anyone sues them, and the Times piece goes on state their position:
The company said updates to Windows 10 are a choice, not a requirement, and that Microsoft offers free customer support for those who run into trouble. People who update to Windows 10 can roll back to their prior system for 31 days afterward, Microsoft says.
Here's the thing: these new lawsuits aren't about the newer, friendlier approach that Microsoft have taken since losing a $10K lawsuit over their GWX tactics; it's about the tactics that lost them that lawsuit in the first place, and the damages that people suffered in the months before Microsoft finally decided to start getting their act together. "We're not doing that any more" does not equal "we never did that at all," and the damages caused in the process have not been erased by Microsoft's decision to finally stop causing more damage.

A couple of other points:
  1. The fact that both sets of plaintiffs have filed for class action status is, obviously, a huge deal. This is the outcome that Redmond were hoping to avoid, when they withdrew their appeal of that $10K judgement in California; this was the spectre of huge damages and huge payouts that lurked beneath the news that NY's Attorney General was planning to file similiar lawsuits.
  2. The fact that there are lawsuits in the U.S. and Israel is also a huge deal. Microsoft have been trying desperately to contain the GWX fallout, but this development turns #upgradegate into a major international news story, one that's only going to get bigger, and costlier, for Redmond.
Corporations don't normally try to win lawsuits like this on the merits of their case; they typically fight a battle of attrition, using superior resources and endless delaying tactics to drive up the cost of continuing the battle until their (normally less affluent) opponents are forced to settle, simply because they can't afford to fight anymore. Teri Goldstein was able to prevail in court, in part, because she filed a small claims suit, which prevented Microsoft's legal team from using those expensive tactics. 

This strategy works pretty well when fighting a legal battle like this in a single jurisdiction, which is why corporations make such extensive use of it; but Microsoft's GWX fiasco happened on a global scale, in every jurisdiction on Earth, and that has them facing the very real prospect of fighting carbon copies of this same legal battle in every legal jurisdiction that exists. That's going to get really expensive, really quickly, even for a company with Microsoft's resources. 

And, much like the regulatory action they're facing in France, these lawsuits, too, were avoidable. Microsoft could have listened to their customers, and to privacy experts, and consumer advocates, and/or industry watchdogs; they could have changed course when it mattered, rather than waiting until the legal bills became too large to ignore. Instead, they chose to do nothing, which could easily turn out to be one of the more costly unforced errors in the history of modern corporations.

Does Microsoft's current strategic plan involve spending a significant percentage of their revenue on legal fees? It's not a rhetorical question, and we're all going to find out the answer. It's really just a matter of time.