Obtaining a refund for unwanted bundled Microsoft Windows

[edwincluck]

Hello All,

 

Last week, I bought a laptop from Dell Online. It cost around £600 and on paper it seems to be quite a good model.

 

The laptop came with a pre-installed copy of the 64-bit OEM Microsoft Windows 7 Home Premium, together with other Microsoft software packages.

 

I do not need this bundled software as I only ever use Linux. I do not like Microsoft's products which I find to be unreliable. Furthermore I strongly disapprove of Microsoft's ethics and do not wish to provide the company with my custom.

 

The laptop was not available for purchase without this pre-installed software.

 

I should like the cost of this unwanted Microsoft software, which adds around £70 to the purchase price of a laptop, to be refunded by Dell.

 

Dell reportedly refunds other consumers, both here in the UK and elsewhere, who object to paying a "Windows Tax" for pre-installed Microsoft software that they neither want nor need.

 

Unfortunately, Dell is currently refusing my requests for a refund on this software.

 

This makes me more determined to secure reimbursement since I believe it is my legal right under European law.

 

Dell's argument is that the Microsoft software was included in the sale of the machine and that if I am not satisfied with that then I must return both the laptop and software for a refund.

 

However, Dell states that this refund comes with a penalty. It would be subject to a deduction for the cost of shipping and handling and a "restocking fee."

 

I doubt that such a penalty is even lawful under the rules of the Distance Selling Directive.

 

Furthermore, it is apparently commonplace in the Francophone world for customers to obtain refunds from Dell, and other computer retailers, for the cost of unwanted software that is bundled with a new computer.

 

In securing their legal right to a refund, French consumers are relying on the judgments of the European courts. These judgments including a 2009 case heard by the ECJ, and more recently the Nov 2010 judgment in Petrus v Lenovo in the French Supreme Court.

 

The right to return unwanted bundled software is based on the Courts' interpretation of European Directive 2005/29/EC. This is known as the "Unfair Commercial Practices Directive".

 

The Directive prohibits twenty-three deceptive trade practices and eight aggressive commercial practices. Dell, Lenovo and Acer have all been found guilty of engaging in unlawful business practices by refusing to refund the cost of unwanted software that was pre-installed on new computers.

 

The legal right to a refund on unwanted bundled software was galvanised in France through a test case brought by UFC Que Choisir, the main consumer rights association in France.

 

The Directive is implemented here in the UK by way of The Consumer Protection From Unfair Trading Regulations. The Regulations came into force in May 2008.

 

In these austere times, it is particularly galling that the purchaser of an expensive new computer is burdened with the cost of bundled software products that he does not even want.

 

For that reason, I should like to see Dell's unethical practice of pre-installing unwanted and costly software brought before a British Court, to hopefully secure a legally binding judgment in favour of the consumer seeking a refund for its cost.

 

Dell has stated that I have three days left (out of seven) to agree to its punitive terms of refund, after which my entitlement to return the laptop ceases altogether, so the company has claimed.

 

A particular bone of contention concerns the terms of the End-User License Agreement (EULA) for the bundled Microsoft software. The terms of this Agreement are not available for examination at the time of purchasing a laptop from Dell. Yet the company claims, nevertheless, that the terms form part of its Contract of Sale.

 

Again, that does not sound lawful. The OFT's Guidance on Unfair Consumer Contract Terms state that a term is unlawful if it "irrevocably binds the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract."

 

This is not the first time that the OFT has had to rein in Dell over its flagrant abuse of our consumer protection laws. In 2006, Dell was ordered by the OFT to remove a number of unlawful terms from its consumer contracts for the supply of computer equipment.

 

 

All comments welcomed.

Edited November 12, 2011 by edwincluck

[rebel11]

Hi edwin

 

Welcome to CAG

 

The guys will be happy to advise as soon as they are available.

[andydd]

Unless there have been prescedent cases that you could relpy upon, why on earth would you want to take on Dell and Microsoft for the sake of a few quid ?. This sounds like it could be an immensly complex cases with costs in the high tens of thousands should Dell & Ms want to get very involved, especially if they are trying to prove a prescedent.

 

Having said all that, im sure similar cases have been in courts before or at least the issue has been discussed, I recall reading about it a while back but cant remember the details.

 

Perhaps it would be nice if you could buy computers with noi pre-installed OS but clearly thats not what the majority of consumers want and it wouldnt drastically lower the cost of them anyway.

 

Andy

[edwincluck]

Unless there have been prescedent cases that you could relpy upon, why on earth would you want to take on Dell and Microsoft for the sake of a few quid ?. This sounds like it could be an immensly complex cases with costs in the high tens of thousands should Dell & Ms want to get very involved, especially if they are trying to prove a prescedent.

 

Hi Andy,

 

Thank you for your reply.

 

There have been court cases in Europe which have set national precedents. Although not binding on the courts of the United Kingdom, those cases pave the way for a change in our laws on the bundling of unwanted and often very costly software in the sale of a new PC .

 

I gave one example of such a case, that of Petrus v Lenovo which was heard before the French Supreme Court and judgment delivered in November 2010.

 

Lenovo, one of the world's largest manufacturer of laptops was found guilty of breaching the implementation in French civil code of the 2005 European Directive that forbids anti-trust racketeering.

 

Lenovo was fined a couple of thousand euros and Mr Petrus was awarded damages of around 400 euros.

 

So this about a lot more than a few quid.

 

Having said all that, im sure similar cases have been in courts before or at least the issue has been discussed, I recall reading about it a while back but cant remember the details.

The ruling in Petrus v Lenovo is a good start.

 

On 15 November 2010, the French Supreme Court (La Cour de Cassation, Premiere Chambre Civile) issued a Public Bulletin in which the ruling was explained.

 

On his professional website, the avocat (lawyer), Frederic Cuif, provides his analysis of the ruling.

 

The backbone of the legal arguments centre on the interpretation of Directive 2005/29/EC, the ‘Unfair Commercial Practices Directive’,

 

In the UK, the Statutory Instrument, Consumer Protection from Unfair Trading Regulations 2008, actually implements the Directive here.

 

There is also a wishy-washy 2008 Guidance Brief from the OFT on Consumer Protection from Unfair Trading.

 

Perhaps it would be nice if you could buy computers with noi pre-installed OS but clearly thats not what the majority of consumers want and it wouldnt drastically lower the cost of them anyway.

I don't want to be forced to buy Microsoft Windows with the purchase of a new PC. And the French Supreme Court agrees with that.

 

And the cost of an OEM copy of 64-bit Windows Home Premium is around £70, which is a significant proportion of the cost of a new laptop.

 

The unwanted, pre-installed copy of Microsoft Windows added around 15% to the purchase cost of my new laptop.

 

I say that is unlawful and that Dell and others need to be put in the dock and ordered to stop this racketeering!

 

Andy

Edited November 14, 2011 by edwincluck

[andydd]

By 'a few quid', I mean thats all you could hope to gain personally, whereas on the other hand IF you were to take them on personally you could face bills of tens of thousands, surely some kind of class action or get an organisation like OFT to take them on would be better ?

 

It is great when the 'little person' stands upto big companies, I recently read the Furguson v B.gas case, where an individual took on British Gas (for harrasment) and won..and the judge commented on out great legal system BUT and its a big BUT if she had lost she was facing bills of 10k for her legal costs and over 30k for British Gas's..worth it?....It is a very brave person who would contemplate such action !...I have been in a similar situation, taking on my landlord in court and facing huge costs...Im glad it was settled out of court.

 

Ultimately you really have no realistic prospect of succeding (without risking huge amounts) in any sort of legal action especially as the complexities of it appear to rely upon foreign/european law.

 

Andy

[edwincluck]

Hi again, Andy.

 

There are a number of issues here.

 

Principle: I don't want to support Microsoft. Microsoft is an odious corporation that behaves like "a cancer on the software industry" (to reuse Bill Gates' words about Linux). We should not be forced to buy Microsoft's shoddy products.

 

Cost: £70 is the lowest price that Windows 7 Home Premium 64-bit OEM can be bought. That is a considerable sum to add to the price of any new laptop.

 

Law: The 2005 Directive has been interpreted in France (and Belgium) in favour of the consumer. The Courts there have ruled that the consumer has a legal right to freedom of choice when buying a new computer. He can choose whether or not to buy it with an operating system pre-installed. And where an unwanted operating system (and Office software, etc) is pre-loaded on a new computer, the consumer is entitled to a refund on the cost of that software.

 

Dell, which supplies one in seven laptops sold worldwide, has been found to have acted unlawfully. It has been abusing its dominance in the industry to curtail the consumer's freedom of choice. It does so for the economic advantage of itself and the Microsoft Corporation.

 

The British consumer should expect to see the Courts of the UK affirming his right to that freedom of choice in this country.

 

The OFT needs to act in the interests of the consumer and tackle this source of great irritation.

 

This is a growing issue for all those who have abandoned Microsoft Windows in favour of the free and reliable operating system, Linux.

 

That group of computer users, who now run into the hundreds of millions, should not be paying a "Windows Tax" to the Microsoft Corporation when buying a new computer.

 

Below is the only comment I can find from the OFT on this matter. It was issued over two years ago.

 

Let us hope that the OFT is now aware of court rulings on the continent.

 

And also, that the OFT appreciates the sizeable group of Linux users who are increasingly angered by the anti-trust behaviour of computer suppliers like Dell.

 

The OFT should acknowledge that the bundling of costly software in the sale of a new computer is distorting the market, reducing competition, and that it is an aggressive commercial practice that is being used by the parties involved to derive unlawful financial gain.

 

Ultimately, this anti-competitive racketeering greatly disadvantages the consumer, and must be stopped.

Direct line (020) 7211 8451

Our ref EPIC/ENQ/E/

Fax (020) 7211 8877

 

Date 28 September 2009

 

Email shreekant . patel @ oft . gsi . gov . uk

 

RE: Microsoft

Thank you for your email of 4 August expressing concern about the bundling of Microsoft’s software with personal computers. I apologise for the delay in replying.

 

By way of background, the mission of the Office of Fair Trading (OFT) is to make markets work well for consumers. We achieve this by promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Our primary duties include the enforcement of competition law, and the application of consumer protection legislation in respect of matters that adversely affect the collective interests of UK consumers.

The first part of your complaint concerns the ability of consumers to obtain a refund when refusing to enter onto a contract for software pre-installed on their PC.

As to whether or not an offence under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) has been committed will depend very much on the facts of the individual case.

Under Part 8 of the Enterprise Act 2002 (the EA02) the OFT, along with other enforcers such as Local Authority Trading Standards Service departments has powers to seek undertakings and court orders to deal with infringements of a range of consumer protection legislation, where such a breach harms the collective interests of consumers.

This means that the OFT can only take action in cases where a breach affects consumers generally or a group of consumers. As such the procedure set out under Part 8 is not available for the purposes of providing redress for individual consumers. Further information on Part 8 of the EA02 is on our website at:

 

http : / / www . oft . gov . uk / advice and resource / resource base / legal / enterprise-act / part8

 

The OFT has a wide range of responsibilities and finite resources and we must concentrate on those areas where we judge that our intervention can do the most good. The decision on whether to act will generally be dependent upon whether the issue raised falls within our administrative priorities in accordance with our prioritisation principles. For that reason, not every complaint we consider will lead to action even though the issue is one on which we may have the power to act.

A copy of the OFT’s prioritisation principles can be downloaded from the OFT website at:

http : / / w w w . o f t . gov . uk / shared oft / about oft / oft953 . pdf

Your enquiry also refers to potentially anti-competitive behaviour. The OFT has not conducted a formal assessment of whether your concerns would fall within the scope of our competition powers as to do so would require the use of a substantial amount of resources.

 

We have therefore considered, in accordance with our prioritisation principles, whether the likely harm to consumers arising from the conduct identified is serious enough to justify the commitment of those resources.

It would appear, that there is a lack of consumer demand for laptops and computers with pre-installed software. If consumer demand within the UK was greater, it is likely that laptops and computers without pre-installed software would be more readily available.

 

We also note that a limited number of alternative laptops and computers are currently available without pre-installed software. In view of this it would appear that the potential for consumer harm in this area is relatively small. We will therefore not be taking further action with regards to your complaint at this time.

We appreciate the time you have taken in bringing this matter to our attention. The OFT is keen to ensure that markets work well for consumers and the complaints we receive are used to help assess and shape the work of the OFT in the future. In this context, we will retain your complaint on our database and incorporate your concerns when considering areas for future investigation or study. Our intention, at this time, not to make further enquiries into this complaint does not preclude the OFT from revisiting the matter should further information come to our attention.

 

Thank you for writing to us.

 

Yours sincerely

Mr S Patel

Preliminary Investigations

Edited November 14, 2011 by edwincluck

[watchinginvestigation2011]

I cant see it is worth the stress. You chose to buy the laptop as advertised, wether wanted the software or not, you see they could argue you could get a laptop form private company build who could do what you want, but of course could not compete with their prices so you chose them. Also did you contact dell in the first place prior to purchase and warn them you did not want the software and in any case would buy the package and then seek refund? I guess not.

 

Thing is the majority of people do like windows and if dont we can just put what operating system wanted on it in stead. Can you imagine trying to argue to apple that you loved their iphone but felt agrieved it had to run their system on it and you prefered windows of a similar android phone?

 

Not worth the stress as said.

[Legislation]

There have been court cases in Europe which have set national precedents. Although not binding on the courts of the United Kingdom, those cases pave the way for a change in our laws on the bundling of unwanted and often very costly software in the sale of a new PC .

 

 

I would like to see this contested, that a national precedent fails to bind a fellow member of the community.

 

There is a very strong case to be put that a precedent ought to bind with due regard to the recitals to explain the purposes of the consumer protection directives, to start with.

 

See recitals (2) through to (5) of 2005/29/EC for example.

 

I wish you luck.

 

On the subject of the time and trouble, it cuts both ways. What would motivate Dell to to spend a fortune on this instead of conceding at an early stage?

[andydd]

On the subject of the time and trouble, it cuts both ways. What would motivate Dell to to spend a fortune on this instead of conceding at an early stage?

 

Unfortunately many big companies are pig-headed and think nothing on spending a small fortune on cases even if they lose or the outcome does them no favours..McLibel case, Furguson v B.Gas, etc..I have had disputes with my landlord/freeholder where he has thought nothing on spending a small fortune on solicitors/counsel far outstripping any amount I have been asking for.

 

Andy

[Legislation]

The fact remains that the vast majority of legal actions are settled out of court, before it gets to a hearing.

 

The OFT's reply is outrageously invidious. If a buyer in France made the same complaint about a purchase from the UK, Section 212 (2) of the Enterprise Act would oblige the OFT to apply a French precedent to "provide protection for consumers which is in addition to the minimum protection required by the Directive concerned".

 

Why should a buyer in France be protected from the aggressive practice while a buyer in the UK is not?

 

I would like to see their answer to that.

 

Were this to go all the way to the European Court of Justice, the stated purposes of the Directive would count above all else.

 

The OFT should also be reminded of section 19 (1) of the CPUTRs —"It shall be the duty of every enforcement authority to enforce these Regulations."

 

Perhaps a Judicial Review of that would help to focus their attention. "duty" implies that you are entitled to act against an enforcer who fails to enforce, not that they own the discretion.

[sparx]

Take a look here: http://en.wikipedia.org/wiki/Windows_refund#The_.22Windows_tax.22. Dell have refunded in the past.

[andydd]

Good Wiki article, although it does highlight the problems in getting a refund, and most refunds have only been given to individual customers, there appear to be not set policy and laws of course vary from country to country.

 

The summary pretty much sums it up "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[53]. In the past, public events (such as the Windows refund day in 1999[54] which gained significant media attention[55][56][57][58][59]) 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.[60]"

[Hammy1962]

You might not like to pay the 'Windows Tax' as you call it Mr Cluck. If you didn't like the package you should not have bought it.

 

It's worth remembering, that without Bill G, Microsoft and all the other 80's pioneers you would not now have the 'choice' you have, MS or Linux or anything else. In fact one could hazard a guess that without mass market PC innovation we all would not be looking at you moaning about it.

 

H

Edited November 19, 2011 by Hammy1962

[Legislation]

You might not like to pat the 'Windows Tax' as you call it Mr Cluck. If you didn't like the package you should not have bought it.

 

 

Strangely enough, this is precisely why an aggressive commercial practice is an offence against the average consumer, because "it thereby causes or is likely to cause him to take a transactional decision he would not have taken otherwise."

 

The choice is to endorse a market monopoly by force, the sort of anti competitive commercial practice that the OFT is supposed to protect against, or to impugn the suppliers for failing to provide an alternative.

[Hammy1962]

Don't be daft, the OP knew exactly what he was doing and buying.

 

There are many ways to get a Laptop or Desktop, new, and without an OS.

 

Dell aren't that great.

 

H

[Legislation]

Don't be daft, the OP knew exactly what he was doing and buying.

 

----

 

In view of Article 8 of the Directive 2005/29/EC it is irrelevant that a buyer would or would not have know exactly what he was doing.

 

The test is whether or not the practice "significantly impairs or is likely to significantly impair the average consumer's freedom of choice or conduct", not a misleading of the buyer.

 

If you are too daft to understand that, study the decision of the French Supreme Court, reported here:

 

http://www.cuifavocats.com/Arret-Petrus-c-Lenovo-du-15

 

It was their opinion, not mine that the practice is aggressive.

[Hammy1962]

I'll think i'll pass on that one. I have a life to live.

 

Politicians, Judges and Lawyers are the only ones to have the time and inclination to come up with ridicuously named 'Directives'.

 

Common sense is what counts, if the OP didn't want to pay the 'Windows Tax' he should have bought a different Laptop, easy.

 

Oh, and for the Mod's which are no doubt looking, see how my reply was not personal, unlike the response 'If you are too daft..............................

 

H

[Hammy1962]

I'll think i'll pass on that one. I have a life to live.

 

Politicians, Judges and Lawyers are the only ones to have the time and inclination to come up with ridiculously named 'Directives'.

 

Common sense is what counts, if the OP didn't want to pay the 'Windows Tax' he should have bought a different Laptop, easy.

 

Oh, and for the Mod's which are no doubt looking, see how my reply was not personal, unlike the response 'If you are too daft..............................

 

H

[Hammy1962]

I'll think i'll pass on that one. I have a life to live.

 

Politicians, Judges and Lawyers are the only ones to have the time and inclination to come up with ridiculously named 'Directives'.

 

Common sense is what counts, if the OP didn't want to pay the 'Windows Tax' he should have bought a different Laptop, easy.

 

Oh, and for the Mod's which are no doubt looking, see how my reply was not personal, unlike the response 'If you are too daft..............................

 

H

[Hammy1962]

Whoa, 3 posts.

 

Sure to get into trouble over that

 

H

[Hammy1962]

Whoa, 3 posts.

 

Sure to get into trouble over that

 

H

[Legislation]

Nobody disagreed that he should have bought a different laptop. Nobody disagreed that it is just as much of a tragedy to purchase a laptop bundled with Windows as it is for a supplier to supply with no alternative available.

 

If this is really so "easy" and you know so much about it, please inform.

 

Short of building a machine for yourself, who provides a laptop without the Windows operating system?

Edited November 20, 2011 by Legislation

[Hammy1962]

A few seconds on Google shows :-

 

http://www.scan.co.uk/products/156-msi-cr620-814xuk-intel-celeron-p4600-20ghz-2gb-ddr3-1066-250gb-hdd-no-o-s? - MSI Good, Celeron, not so good.

http://www.premiergent.co.uk/pages/ProductRangeNotebooks.asp - Never Dealt with them

http://www.acerdirect.co.uk/Acer_Aspire_7535_Laptop_-_US_Keyboard_and_No_OS_A1-S2.PAB0X.002/version.asp - I quite like Acer products

http://www.novatech.co.uk/laptop/#utm_source=tradedoubler&utm_medium=affiliate&utm_campaign=1503186_Skimbit+UK

 

Just from the first Google search, if i was genuinely trying to buy then its worth spending an hour or so to get the best specs.

 

It really is not hard.

 

H

[MaxxPower]

I don't think you have much of a case here really. Dell aren't forcing you to buy their product, you chose to buy it knowing full well that it came with a pre-installed copy of MS Windows. It may take some hunting, but I believe there are retailers out there who sell laptops with a Linux pre-installed instead. Dell themselves experimented with it a while ago, but I don't think it took off very well and I'm not sure they offer Linux anymore.

 

What you're asking is like the equivalent of going into a McDonalds, ordering a cheesburger and then telling them that you don't want the bun and asking them to not charge you for it. Or buying a car, and insisting that they give you a refund on the wheels because you've got your own that you want to put on instead.

[andydd]

The thing is that there are not that many retaillers selling OS-less laptops out there, but there are zillions who sell it with Windows pre-installed at they are very competeive so you can buy a Windows laptop often for the same price or less than one without.

 

I found this was the case when I bought mine, it came with XP which I didnt want so I just formatted it and put on my choice of OS (which was Windows 7 at the time).

 

Andy