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Microsoft Slammed With Suit Over Killing Third-Party Xbox 360 Storage

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Christo [PCD]
Tue Nov 24 2009, 07:14pm
Christo [PCD] Main Admin Registered Member #1 Joined: Fri Feb 03 2006, 10:48am
Posts: 4503
News item posted

Datel claims Microsoft is violating antitrust laws

Like Apple's campaign against iPhone unlocking, Microsoft has justified trying to kill Xbox 360 modding with claims that it supports piracy or other foul activity. And like Apple, it has gone to the length of damaging its own customer's legitimately purchased products to try to stomp out modding.

Microsoft, like Apple, is also tightening its control on the hardware, disallowing third party memory units for the Xbox 360. While its bricking of modded consoles hasn't earned it a lawsuit -- yet -- its decision to kill third party memory units apparently has.

UK-based Datel, which manufactures a third-party memory unit, has filed suit in U.S. District Court in San Francisco, accusing Microsoft of unfairly favoring its own Xbox 360 accessories by disabling the functionality of competing technologies.

A hard drive or memory unit is necessary to store saves, Gamertag information, or software purchased on Xbox Live, though newer units have a limited amount of internal Flash (512 MB) that can be used for these purposes.

Datel's complaint states, "Microsoft's purpose in disabling Datel's memory cards is to prevent consumers from choosing a Datel product that offers far better value for the price. There is no benefit to consumers from Microsoft's decision to target and disable Datel's memory cards. To the contrary, Microsoft's actions will leave approximately 50,000 consumers with useless memory cards and (without the ability to access their data on the cards), forestall innovation, and deprive future consumers of the benefits of competition."

The company is seeking unspecified monetary damages and an injunction banning Microsoft from "disabling or erecting technological barriers to Datel accessories."

While Microsoft claims it killed the third-party memory units to protect consumers against cheating, it may have had other motivations, as it stands to bump its own profits by eliminating the third party competition. Whereas Microsoft's unit is only 512 MB and retails for $29.99, Datel offers a much larger 2 GB unit for only $39.99 and the unit comes with expandable/swappable capacity, via an SD slot. The company's complaint can be found here (PDF).

Microsoft experienced previous class lawsuits when its consoles damaged discs or failed with the iconic Red Ring of Death (RROD) failure which has reportedly claimed 54.2 percent of the company's consoles over their lifetimes. Microsoft has also been sued in the past for bricking its customers consoles.

Datel's no-longer-allowed memory unit retails for $39.99 and offers 2 GB of storage. Microsoft claims it has disallowed it as it "promotes cheating." (Source:

[Submitted by Christo [PCD]]

1 1259082314 Micros

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