More Computing

Bundling Practices

Another annoying limitation on Windows operating software and other Microsoft products like Office is that they try to restrict transfer rights when they are bundled in OEM (Original Equipment Manufacturer) configurations. As many of us know, Microsoft has built its monopoly in part because of the heinous licensing restrictions they have put on the OEM market. If you are an OEM and you want to include Microsoft software as one of your options, there are some serious limitations on what you can and cannot do. Microsoft has included language in large contracts that gives you price breaks if and only if you agree to include Windows with every single machine you ship out the door. The price breaks were massive, but technically, the decision was not forced, it was an option. But if you did agree, Microsoft wanted to ensure that you played ball, so they actually set up a system where people could turn you in if you failed to follow the agreement to the letter. Even if a client wanted no operating system at all on a computer, they OEM was obligated to bundle it and charge for it or they would be in violation.

As time went on, other methods of ‘coercion’ were used. If you wanted to qualify for pre-retail access to the latest version of Windows, you had to be in full compliance. If you wanted to be able to offer Microsoft Office as an option, you would have to exclude all other office suite bundling options, such as Smart Suite or Corel Office.

Your Rights As A Buyer

Perhaps the most annoying for me, and many others, has been how they word the EULAs that come with these bundles. They state that the OEM, not Microsoft is responsible for all software support, and that the agreement you have is with the OEM only. Further, even though you purchase the system and the software, Microsoft states that you do not have the right to transfer the licenses to another computer you may own if you decide to sell or dispose of that particular system. Confusing? I think so. In 98 SE, they throw in language like the following:

“The SOFTWARE PRODUCT is protected by copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. The SOFTWARE PRODUCT is licensed, not sold. The term "COMPUTER" as used herein shall mean the HARDWARE, if the HARDWARE is a single computer system, or shall mean the computer system with which the HARDWARE operates, if the HARDWARE is a computer system component.”

Then other lines read:

“Single COMPUTER. The SOFTWARE PRODUCT is licensed with the HARDWARE as a single integrated product. The SOFTWARE PRODUCT may only be used with the HARDWARE as set forth in this EULA.”

Yet later in the EULA, there is this:

“Software Product Transfer. You may permanently transfer all of your rights under this EULA only as part of a permanent sale or transfer of the HARDWARE, provided you retain no copies, you transfer all of the SOFTWARE PRODUCT (including all component parts, the media and printed materials, any upgrades, this EULA and, if applicable, the Certificate(s) of Authenticity), and the recipient agrees to the terms of this EULA. If the SOFTWARE PRODUCT is an upgrade, any transfer must also include all prior versions of the SOFTWARE PRODUCT.”

Finally, for purposes of this article, there is this:

“Termination. Without prejudice to any other rights, Manufacturer or MS may terminate this EULA if you fail to comply with the terms and conditions of this EULA. In such event, you must destroy all copies of the SOFTWARE PRODUCT and all of its component parts.”