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back to article Microsoft UK cracks another head over grey software

Microsoft has collared another pirate in the UK for flogging grey software on eBay. The software giant has scored £35,000 in damages against an internet trader for copyright violations and illegally importing cheap American software to Europe. R J Campbell and his company R J Campbell Ltd, which traded as "Software Price Beater …

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Anonymous Coward

zzzzzzzzzzzzzz

Please, let's have some real reporting of real facts.

Was the bloke a pirate dealing in counterfeit software, which most folks would agree is A Bad Thing (as well as criminal in most jurisdictions around the world, perhaps with the exception of America's new favourite business partner and banker, China)?

Or was this chap just an opportunist trader indulging in a bit of "parallel importing" of genuine legitimate software, using the same market forces (country-based differential pricing for identical product) the Big Boys (ab)use, innovatively trying to provide customers with genuine software via unusual (but not necessarily criminal/illegal) routes?

The big boys (not just Microsoft, as Tesco vs Levi will confirm) are quite happy to use country-based differential pricing when it suits their profits but heaven help anyone who visibly tries to rock the boat.

Anyway, there's a world of difference legally and morally between real counterfeiting and a simple case of parallel importing, even if your coverage of Microsoft's press release appears to want people to think they are morally, financially, and legally equivalent.

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reseller ecosystem?

"to clamp down on illegal importers who are destabilizing the whole reseller ecosystem"

ie to ensure that arbitrary price increases can be protected across borders

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Parallel Imports

If us Brits were able to purchase software (and everything else) at the same prices as else where, then perhaps there wouldn't be a need for grey importers, it's not like the cost to convert a £ to a # and a " to a @ on a keyboard template is that big...

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Price fixing

What I don't get... monopolies are not allowed to do price fixing - nor are large companies in major markets like airlines, utilities etc...

How come Microsoft - a monopoly - is _encouraged_ to price fix and price gouge?

And why are we still tumbling headlong into Europe?

Grrrr

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Shocked that I was surprised to find this illegal

They're suing a bloke for re-selling something they sell cheaper in another country? As the product will be identical (keyboard maps mentioned above are shipped with every product) why is it illegal for him to buy and sell?

If anything it should be illegal for the monopoly to be allowed to force its evidentially unnecessarily high prices on us!

Hell if i didn't pirate MS products like everyone else I'd be pissed. (btw does that mean el'reg will get a million dollars for the drinking fund for handing me over the the BSA?)

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No such thing as a SUGGESTED retail price anymore?

"Under EU law, parallel imports describe branded goods bought in one country and sold elsewhere within Europe at a cheaper price than the trademark holder intends."

Why should the trademark holder have any say in the selling price of their product? If they want it sold for a higher price, it's easy -- they should sell it at a higher price. Don't tell me that if I buy a product for $5, that I then have to sell it for $50. There is a reason the "price the trademark holder intends" is called the SUGGESTED retail price (at least here in the states). If I want to sell a product for little or no profit, that's my choice.

There are many factors that go into creating a price point for a product. But the primary, most basic factor, is "how much are you willing to sell that product for?" If you're willing to sell it to me for $10, then why should someone else have to pay more in the same exact circumstance? Obviously different regions' taxes, shipping, etc. can legitimately add to the price. But to create an artifically-high price point for no other reason than "because we can" is ridiculous. We're supposed to have a "free market", right?

Criminalizing the free market by artificially restricting where a person or company can legitimately buy a genuine authentic product serves no purpose except for those wanting to rip people off. At least that's one thing the DVD association didn't do (to my knowledge). They decided to inconvenience and upset everyone by artificially splitting the world into "regions", but at least you can still legally purchase a player for every region code (that is, a separate player for each region, not the il/questionably-legal multi-region players).

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parallel importing

Here in NZ parallel importing was made specifically legal a few years ago, resulting in huge drops in prices for most durable consumer goods. I'm not sure about software (as a standalone product, rather than bundled with a pc), but if you want to buy a TV, for example, there are outlets here that will sell you a parallel imported name brand TV, for perhaps a third less than the "Official Reseller". You just have to make the judgment call as to whether the Parallel importer will be around long enough to honour any warranty. I see ads in the Saturday papers for Ipods at $150 below the usual retail price. The world did not end when the new laws were enacted, despite what the big retailers predicted.

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Anonymous Coward

I am not sure that this judment is correct.

It is my understanding that parralel importing was determined by a case of Tesco V Levis and it was determined that Levis was a premium brand and therefore was allowed to control its brand and parrallel imports were judged to be not legal. However, the important thing was that it was to protect a premium brand, so you could not necessarly apply the same rules to say soap maunfacturers. So I would have thought that this case should have turned upon weather Microsoft was a premium brand...

Of course selling counterfit goods has no defence.

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Justice?

Dont confuse Justice with big business, the two are divorced. Its perfectly acceptable for multinationals to price gouge other nations by as much as 100%, sell buggy incomplete code etc, thats fine.

Freedom and fair trade is allowed upto the point decided by the multinationals who pull the strings of government. Business seems to enjoy power and privilege undreamed of by the citizens on whom society is allegedly based and run for the benefit of.

....and all the time the sheep complain at being gouged and ripped off and drm'd to death while still rushing to buy "new and improved"..

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We call it "price-fixing" here in the States.

Well, it's moral justification for software piracy, anyhow.

Although anyone stupid enough to steal Microsoft products deserves what he gets, especially with so much free open-source software available (and with the ability to run "windows" applications on linux, why would ever think of installing Windows?).

But there are specific laws *forbidding* that behavior (price-fixing) in the USA. I guess in that one small way, we are more advanced than Europe. Don't even talk to me about privacy, though.

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Anonymous Coward

WTF?

This is nothing but price fixing, and price fixing is illegal in the UK. So, how do I stand buying my M$ products direct from a EU country that sells it much cheaper than UK prices? The product I buy is a legitimate copy, not counterfeit, and I'm allowed to buy stuff from any EU country, so would I be prosecuted? Well, no, I wouldn't, simply because it is a legal purchase. Why, then, is it illegal to purchase the same thing from another EU country and sell it at a profit, but still below the ripoff prices we have come to expect in the UK?

Whose pockets are M$ filling to get these judgements? It stinks!

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RW

@ Chris

"There are many factors that go into creating a price point for a product. But the primary, most basic factor, is "how much are you willing to sell that product for?"

Don't forget, however, that the *value* of anything is determined by what buyers are willing to pay for it, not what the seller thinks it's worth. Pop quiz tomorrow on the operative distinction between price and value.

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Anonymous Coward

So much for the "Free Market"

You hear a lot of noise about free trade agreements, open borders and so on but when you look at what happens in practice then free trade only applies to corporations, not individuals.

But then what did you expect? Capitalism is a rigged system, it always has been and it always will be.

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Anonymous Coward

If you allow this

Then this is what will occur you are not required to allow it so stop bitching and do something already.

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Anonymous Coward

No difference to the Music retailler case a while back

This is no different to a reseller of Audio CDs who was prosecuted for buying somewhere else and selling in the UK.

Why shouldnt I be allowed to buy my softtware (as long as its not counterfeit) anywhere I like, if I can save money.

The government need to get to grips with stuff like this and ensure that there is no penalty for buying good, not just software wherever it is cheaper.

If someone can buy legit software elsewhere cheap and sell it in the UK at a reduced price to the official M$ prices, this makes them a 'thief' or similar.

I would call him an entrepreneur

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Parallel imports ?

"Under EU law, parallel imports describe branded goods bought in one country and sold elsewhere within Europe at a cheaper price than the trademark holder intends."

I am not sure this is true. What would be true would be : "Under EU law, parallel imports describe branded goods bought in one country outside EU and sold elsewhere within Europe at a cheaper price than the trademark holder intends."

I discussed with many vendors and all agreed with saying that they could do nothing to bar parallel import within EU : that is "free trade agreements within EU". So their only protection is to apply unified pricing within Europe...

Of course, England is particularly bad treated by software vendors, as most apply highest prices in the continent, while nothing justifies it, especially not translation charges ;)

Also, that is true that "suggested retail price" is not "price the trademark holder intends". A vendor cannot hide behind a lawful curtain for unlawful practices ;)

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Anonymous Coward

Business Opportunity

US Software sellers - are you watching this?

As far as I can see, there would be nothing wrong with a US based M$ re-seller offering their products on eBay at US prices. UK buyers would then be able to purchase at those prices without breaking any laws. My understanding is that if you legally purchase something overseas for your own use (which you would be in this case), then you are legally allowed to import it into the UK (after paying UK duty and VAT if it is over your personal limit). It's the same law that allows you to purchase downloads from allofmp3.com

Come on guys, there's ways to beat the rip-off sharks.

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Might get a bit messy

"The Business Software Alliance is outing pirates by placing a bounty on their heads"

Well with global warming that's just silly, they're going to be all sticky in no time at all. I suppose then they'll turn themselves in which is the idea?

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Anonymous Coward

Licence.

I am wondering If this is to do witht he fact that he was not just selling a disc, but a licence? And also MS have moand about the suport they provide for there products befor (Arguing that is wht OEM's get there software so much cheaper), so may say that you are paying to use there, for example, Polish suport and using there English suport? Which quight frankly I find silly. How many prople accualy use MS's suport, except for Buisness (Which has totaly separet licences and suport to personal users), or there stupid online automated thisng (Which is genraly rubish, and gives me a headache as genraly I have tryed all the, normaly very basic, things they sugest)

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Anonymous Coward

Of course the EU and the UK support this...

How else could they expect Microsoft to keep affording the fines for anti-competitive behaviour. Although, as this is by definition anti-competitive (at the reseller level), surely it's grounds for another EU investigation and huge fine.

Keep em coming, it's money we don't have to find to support the pointless edifice of EU legislation...

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Anonymous Coward

@Morely Dotes

"and with the ability to run "windows" applications on linux, why would ever think of installing Windows?"

Because some hardware companies suck up to M$ and refuses to release drivers for anything other than window$, that's why. For example, I have a computer at home that cost me the whole of my college graduation present money (some Ringgit Malaysia 10k). Without Windows, the PhysX card can't function, and the X-Fi card can't function unless you happen to be running a x64 distro that's built just right(building a SLUB type kernel knocks your chance of getting the driver to work down to zero).

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Pum

Another reason to hate M$

This verdict is so wrong by common sense, if not by the crocked standards of our apparently broken legal system. R J Campbell apparently operated a simple business model dating back centuries - buying goods somewhere cheap, shipping them someplace where there is demand for those goods, and selling them at a profit. A legal system that finds fault with that is a broken legal system - the law is an ass!

What should be happening here is that the European Commission should be extending its investigations into M$ to include price fixing. The fact R J Campbell could buy M$ products in the USA, probably at retail price, ship them to the UK, cover his day-to-day business costs, and still sell at a profit for less than regular UK channels, clearly illustrates that something is badly wrong with UK channel pricing in the UK; that's common sense, but sadly our sold-out-to-big-business government and legal system has become detached for that and many other aspects of common sense.

</wipe_flecks_of_foam_from_mouth>

It's not like he sold some kind of proscribe product like guns or medication, that are illegal to sell or require some kind of license.

Grey imports have been a problem for a long time. I have a motorbike that was a new grey import in 1998. It was imported from Germany, and so is a completely legal grey import under EU law. However, the manufacturer still gave me the run-around and tried to (illegally) not honour the warranty. If a grey import comes from outside the EU then by EU law the manufacturer does not have to honour the warranty, and probably a number of other disclaimers apply. In the case of M$ software this could mean no update downloads working, if M$ can tell from the license key which region the software should be in and where it actually is (I suspect this is not the case, as people travelling would not be able to update on the road). Even if that was the case, the gripe with the seller would be from the people who bought the software and found they could not get updates, not from M$.

</rant>

There, I feel better.

Assuming that Mr Campbell was doing nothing more wrong than buying legit software in USA and selling here, is there a fund to which we can contribute to help out with the fine?

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Anonymous Coward

Legalised THEFT

It is high time that EU law was changed, to make parallel importing a crime ONLY if the manufacturer agrees to supply EU dealers at a price not exceeding that which they COULD AND *SHOULD* have been allowed to buy it from the other country.

If the manufacturer wants to sell in the EU at a higher price, then they absolutely MUST forfeit the right to prevent people from buying in another country of their choice.

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Anonymous Coward

"Here in NZ parallel importing was made specifically legal a few years ago"

Sense at last! But I wonder if there's anybody in the EU that understands what sense means.

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@ Sticky Simon

"The Business Software Alliance is outing pirates by placing a bounty on their heads"

Agreed the bounty will rapidly melt and make a terrible mess. But presumably the BSA will then follow up with a bucket o' feathers, the bounty having taken the place of eco-unfriendly tar.

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They bring it upon themselves

Price for Vista ultimate on amazon.com: $324

Price for Vista ultimate on amazon.co.uk: £320

Current exchange rate: 2.04 dollars to the pound.

Microsoft's comprehension of this fact: 0%

A small regional increase is one thing, but at twice the cost, why on earth should I not buy American and import?

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Licensed not sold?

According to the software companies, the software is licensed and not sold (setting aside the California judgement on Softman Products vs Adobe 2001, http://www.linuxjournal.com/articles/web/2001-11/5628/softman-v-adobe.html, where "The reality of the business environment also suggests that Adobe sells its software to distributors.")

There is text in the EULA explicitly outlining how the license can be transferred to another party, and the only relevant restriction appears to be complying with US export restrictions.

So anyone got an opinion on whether the court banning the transfer of licenses between countries? Or was the software counterfeit, as the copyright infringement bit would suggest? Or does the court ignore the license and it's "not sold" element of the transaction and state that the software was originally legally sold but became an unlawful parallel import when resold in Europe?

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Self defeating

Frankly it's Microsoft themselves that are probably more responsible than anyone else for the damage to the software reseller market.

By pricing thier software prices in the UK at pretty much a 1£::1$ exchange rate compared with the cost in the US, they attempt to openly exploit thier own dominant market position and exploit thier customer base.

As if further proof were needed Microsoft also follow this policy with the pricing of the xBox.

But whilst I'm sure Microsoft won't listen to anything I say on here, if Microsoft's software sales in the Vista era are ever going to turn around from thier current tragic position, they're really going to have to examine thier policies towards thier (potential) customers in this regard because right now it doesn't look like too many people are buying thier boxed software any more.

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Two-faced

So this guy gets slapped for what Dell must do every day. In effect they sell MS software 'from' the US at US prices or below when installed on PCs. It's because of this UK systems integrators can't compete.

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@ Sampler

Surely at current MS exchange rates, that's a million pounds?

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Because you don't buy software...

... you licence it. So if the EULA says that "this software is only for sale in the US" and you buy it and re-sell it in the UK then that software is unlicenced, and therefore "counterfeit" even though it was originally manufactured, packaged and wholesaled by the original author. It is on this technicality that grey imports are deemed "illegal".

That's not to say it isn't a crock of monkey-sh*t, but it's the law.

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