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Bundling of Microsoft Windows

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Title: Bundling of Microsoft Windows  
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Subject: Microsoft, 343 Industries, Windows XP, Microsoft product divisions, Colloquis
Collection: Microsoft Criticisms and Controversies, Operating System Criticisms, Windows Xp
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Bundling of Microsoft Windows

Bundling of Microsoft Windows is when computers have been installed with Microsoft Windows before purchase. Microsoft encourages original equipment manufacturers (OEMs) of personal computers to include Windows licenses with their products, and agreements between Microsoft and OEMs have undergone antitrust scrutiny. Users opposed to the bundling of Microsoft Windows have sought refunds for Windows licenses, and although some customers have successfully obtained payments (in some cases after litigation or lengthy negotiations), others have been less successful.


  • The "Windows tax" 1
  • Boot locking concerns 2
  • License refund policy 3
    • Competition Act 2002 3.1
  • Public response 4
  • References 5

The "Windows tax"

A common complaint[1] comes from those who want to purchase a computer without a copy of Windows pre-installed and without paying extra for the license either so that another operating system can be used or because a license was already acquired elsewhere, such as through the DreamSpark Premium program.[2] Microsoft encourages original equipment manufacturers (OEMs) to supply computers with Windows pre-installed[3] by engaging in private agreements[4] and arguing that consumers benefit by not having to install an operating system.[5] Because the price of the license varies depending on discounts given to the OEM and because there is no similar computer that the OEM offers without Windows, there is no immediate way for a consumer to find out the price of a bundled Windows license. In 2009, Microsoft stated that it has always charged OEMs about $50 for a Windows license on a $1,000 computer.[6] In a 2010 ZDNet article, Chris Clay wrote that Dell computers with Ubuntu preinstalled were priced higher than identical systems with Windows preinstalled, even though Ubuntu is free and open source.[7]

Virtually all large computer vendors continue to bundle Microsoft Windows with the majority of the personal computers in their ranges. The claimed increase in the price of a computer resulting from the inclusion of a Windows license has been called the "Windows tax" or "Microsoft tax" by opposing computer users.[8][9] According to the Findings of Fact in the United States Microsoft antitrust case of 1998, "One of the ways Microsoft combats piracy is by advising OEMs that they will be charged a higher price for Windows unless they drastically limit the number of PCs that they sell without an operating system pre-installed. In 1998, all major OEMs agreed to this restriction."[4] Microsoft also once assessed license fees based on the number of computers an OEM sold, regardless of whether a Windows license was included; Microsoft was forced to end this practice due to a consent decree.[8] The decree, entered into in 1994, barred Microsoft from conditioning the availability of Windows licenses or varying their prices based on whether OEMs distributed other operating systems; author Wendy Goldman Rohm said that the decree was effective in allowing Dell and HP to offer Linux computers.[10] In 2010, Microsoft stated that its agreements with OEMs to distribute Windows are nonexclusive, and OEMs are free to distribute computers with a different operating system or without any operating system.[5]

In a 2001 article in Byte, it was reported that license agreements between OEMs and Microsoft forbade OEMs from including Windows alongside another operating system on the same computer.[11]

Users can avoid the "Windows tax" altogether by assembling a computer from individually purchased parts or purchasing a computer from an OEM that does not bundle Windows. Some smaller OEMs and larger retail chains such as System76 have taken to specializing in Linux-based systems to their advantage from major suppliers' paucity of non-Windows offerings. Some Linux distributors also run 'partnership' programs to endorse suppliers of machines with their system pre-installed.[12]

In September 2014, the Supreme Court of Italy in ruling 19161/2014 decided that a laptop buyer was entitled to receive a refund (of Euro140) for the price of the Microsoft Windows license on a computer, saying that bundling was "a commercial policy of forced distribution" and slammed this practice as "monopolistic in tendency".[13][14][15]

Boot locking concerns

Microsoft requires that OEMs support UEFI secure boot on their products to qualify for the Windows 8 Logo Program.[16] Concerns have been raised that OEMs might ship systems that do not allow users to disable secure boot or install signing keys for alternative operating systems.[17][18] Such computers would be unable to boot any non-Windows operating system (unless that operating system was signed and its keys included with the computer),[19] further complicating the issue of Windows refunds. While Microsoft claims the OEMs would be free to decide which keys to include and how to manage them,[20] competing OS vendors' relative lack of influence on the desktop OS market compared to Microsoft might mean that, even if signed versions of their operating systems were available, they might face difficulties getting hardware vendors to include their keys, especially if end users won't be able to manage those keys themselves.[21] Boot locking is now required for ARM devices.[22]

License refund policy

Microsoft does not provide refunds for Windows licenses sold through an OEM, including licenses that come with the purchase of a computer or are pre-installed on a computer.[23] A Microsoft Denmark representative stated that Microsoft's Windows license terms allow OEMs to offer a refund for just the Windows license.[24] According to Microsoft's End User License Agreement for Windows 7, the ability to receive a refund for the operating system is determined by the hardware manufacturer:[25]
By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, contact the manufacturer or installer to determine its return policy. You must comply with that policy, which might limit your rights or require you to return the entire system on which the software is installed.
Older versions of Microsoft Windows had different license terms with respect to the availability of a refund for Windows:[26]
By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, contact the manufacturer or installer to determine their return policy for a refund or credit.

OEM policies for refunding unused Windows licenses vary. Some OEMs have programs that specifically allow a user to receive a refund for an unused Windows license. Acer US has a Windows refund program where a user can ship a computer with an unused copy of Windows to the Acer service center and have the computer returned without Windows for a refund.[27] Acer's policy requires the customer to return items at their own expense, and the balance received by the customer can be as low as €30.[28] Other vendors, like Dell, have ad hoc procedures for users to request a refund of a Windows license.[29] In some cases, vendors have asked that customers requesting refunds sign non-disclosure agreements.[30][31] Still other vendors, such as Lenovo, have return policies that do not allow for a partial refund for just the Windows license, requiring the entire computer to be returned to obtain a refund.[32] Litigation by users denied a partial refund for the unused Windows license has resulted in rulings in France and Italy that bundling Microsoft Windows and then refusing to offer partial refunds for just the Windows license violates applicable law.[33][34][35][36] In India bundling is challenged by users as a violation of Competition Act 2002 and one of them has sent a legal notice to HP.[37][38]

Competition Act 2002[39]

“Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services, including— (a) tie-in arrangement; … shall be an agreement in contravention of sub-section ( 1 ) if such agreement causes or is likely to cause an appreciable adverse effect on competition in India. Explanation.—For the purposes of this sub-section,— (a) “tie-in arrangement” includes any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods; ”

Public response

The difficulties associated with getting a Windows refund from OEMs have evoked a strong response from the public. Websites have been created for the specific purpose of spreading information about the issue and educating others on their options for getting a refund.[40] In the past, public events (such as the Windows refund day in 1999[41] which gained significant media attention[42][43][44][45][46]) have also been organised, with people expressing their displeasure towards Microsoft and computer OEMs for the bundling of Windows with new computers. The overall goal of such events has been to get OEMs to expand their selection of computers without a copy of Windows pre-installed, with the additional goal of getting them to revise and improve their refund policies while the first goal has not been met.[47]


  1. ^ "Buying without Windows-Don't want Windows?". Best Price Computers Ltd. February 2007. 
  2. ^ "Call on students". 2009-09-27. 
  3. ^ Lettice, John (2000-11-28). "MS: it's (nearly) illegal to buy PCs without Windows". The Register. 
  4. ^ a b "U.S. v. Microsoft: Court's Findings of Fact". 1999-11-05. 
  5. ^ a b Protalinski, Emil (2010-01-07). "Italian class-action suit targets unwanted Windows installs". Ars Technica. Condé Nast. Retrieved 2012-12-28. However, consumers benefit from the preinstallation of Windows on PCs. It provides the best user experience from the time a consumer first turns on the PC, and saves consumers the substantial effort and resources associated with having to install an operating system that functions properly." ... "Computer manufacturers are free to sell PCs pre-installed with another operating system or no operating system at all," the [Microsoft] spokesperson continued. "It's also important to note that Microsoft's agreements with OEMs are nonexclusive. 
  6. ^ Protalinski, Emil (2009-09-16). "OEMs pay Microsoft about $50 for each copy of Windows". Ars Technica. Condé Nast. Retrieved 2012-12-28. 
  7. ^ Clay, Chris (2010-02-10). "Linux users, get your Windows refund today". ZDNet. Retrieved 24 August 2013. 
  8. ^ a b Reimer, Jeremy (2007-05-25). "Dell goes Ubuntu; "Windows tax" is $50 according to pricing". Ars Technica. Condé Nast. 
  9. ^ Demerjian, Charlie (2007-03-03). "Cost of Windows tax calculated". The Inquirer. Incisive Financial Publishing. 
  10. ^ Fried, Ina (2004-07-09). "Microsoft's 1994 consent decree: Boon or bust?". CNET. Retrieved 5 February 2013. 
  11. ^ Hacker, Scot (August 2001). "He Who Controls the Bootloader".  
  12. ^ "Find a Partner". Ubuntu Partners. Canonical. 
  13. ^ Windows Tax Shot Down In Italy,, 14 September 2014
  14. ^ Italy: High Court shoots down Windows tax, Free Software Foundation Europe, 12 September 2014, accessed 14 September 2014
  15. ^ Hp perde causa: il software preinstallato indesiderato è rimborsabile, La Republica, 11 September 2014, accessed 14 September 2014
  16. ^ van der Hoeven, Arie (September 20, 2011). "Delivering a secure and fast boot experience with UEFI". 
  17. ^ Garrett, Matthew (September 20, 2011). "UEFI secure booting". 
  18. ^ Anderson, Ross (September 20, 2011). "Trusted Computing 2.0". 
  19. ^ Leyden, John (September 21, 2011). "Windows 8 secure boot would 'exclude' Linux". The Register. 
  20. ^ Sinofsky, Steven (September 22, 2011). "Protecting the pre-OS environment with UEFI". 
  21. ^ Garrett, Matthew (September 23, 2011). "UEFI secure booting (part 2)". 
  22. ^ Williamson, Aaron (January 12, 2012). "Microsoft confirms UEFI fears, locks down ARM devices". 
  23. ^ "Microsoft North American Retail Product Refund Guidelines". Microsoft. Retrieved 2012-08-27. 
  24. ^ Gitte Bank Jensen (2011-01-14). "Køb din computer billigere uden program" (in Danish). 24timer. 
  25. ^ "Microsoft Software License Terms: Windows 7 Professional". 
  26. ^ "Microsoft software license terms for Windows Vista Home Basic, Home Premium and Ultimate versions". 
  27. ^ "How do I obtain a refund for the Microsoft Windows Operating System?". 2011-04-04. 
  28. ^ "Man wins damages from Acer over Voleware refund". The Inquirer. Incisive Financial Publishing. 2007-09-22. 
  29. ^ Ward, Mark (2006-11-14). "User refund for no Windows option". BBC News (BBC). Retrieved 2010-01-15. 
  30. ^ Hillenius, Gijs (2008-08-31). "CZ: Lenovo fails to silence GNU/Linux user on Windows refund". Open Source Observatory & Repository Europe. Archived from the original on 2011-07-20. 
  31. ^ Lilian, Niv (2008-12-03). "Dell customer awarded Windows refund". Ynetnews. 
  32. ^ "Lenovo community: Windows Refund". 2009-10-01. 
  33. ^ "Italy: High Court shoots down Windows tax". Free Software Foundation Europe (quoting La Repubblica). 2014-09-12. 
  34. ^ "Ruling: Acer must refund purchase price of pre-installed software that is not being used". heise online. 2007-09-26. 
  35. ^ "HP must reimburse Italian PC buyer the amount paid for Microsoft software". 2007-10-29. Archived from the original on 2009-03-04. 
  36. ^ Sayer, Peter (2012-02-07). "Lenovo ordered to pay €1920 for making French laptop buyer pay for Windows too". Techworld. 
  37. ^ "21-year-old takes on HP for bundled OS". Times of India. 2014-09-11. 
  38. ^ "Refund for unused Microsoft Windows 8 Operating System Software". Software Freedom Law Center, India. 2014-09-02. 
  39. ^ "Competition Act 2002". 
  40. ^ "AFUL". Retrieved 2010-01-05. 
  41. ^ Merlin, Marc. "Windows refund day". Retrieved 2010-11-12. 
  42. ^ "ABC News: Windows refund day video". 1999-02-15. 
  43. ^ "Windows refund day". BBC News (BBC). 1999-02-16. Retrieved 2010-01-05. 
  44. ^ "A tiny protest makes a big noise". Slashdot. 1999-02-17. Retrieved 2010-11-12. 
  45. ^ Harmon, Amy (1999-02-16). "'"Self-Proclaimed Computer Geeks Hold 'Windows Refund Day. The New York Times. Retrieved 2010-11-12. 
  46. ^ Evangelista, Benny (1999-02-16). "They Don't Do Windows". The San Francisco Chronicle (Hearst Communications). Archived from the original on 2009-04-27. Retrieved 2010-11-12. 
  47. ^ Kosmin, Adam (2003-06-27). "Windows Refund Day II: Next Steps". Linux Journal. Retrieved 2010-11-12. 
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