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Microsoft sued for “extortion-like” practices in recent anti-piracy raid


Microsoft has recently come under legal fire with their recent anti-piracy raids, wherein the software giant was sued for their “extortion-like” handling of a recent raid on a Guatemalan insurance agency.

Seguros Universales, one of the largest insurance firms in Guatemala, is suing Microsoft for their unprofessional handling of an apparent unwarranted anti-piracy raid. With the help of the Business Software Alliance and local authorities, Microsoft allegedly demanded a payment of $70,000 USD from the insurance agency or else their entire computer database would be confiscated.

Anti-piracy “raids” of this nature are quite common as Microsoft and the Business Software Alliance (BSA) ardently stand against software piracy, and actively contribute to thwarting the use and distribution of illegal software across the globe.

Although their cause is justifiable, the overall raiding process has been scrutinized by various courts, and Microsoft has lost a similar case due to the “deceptive nature” of the raiding process.

On these anti-piracy raids, the companies are usually aided by BSA officials as well as local law enforcement–and some of them are reportedly armed. Once the officials arrive at the offices of the alleged software pirates, the accused companies are often given the choice between paying a fine or having their computers taken away.

The Guatemalan firm experienced such an event, and is suing the software giant for their apparent “extortion-like practices during the raid:

“Microsoft appeared with armed Guatemalan law enforcement officers and halted plaintiffs’ business operations. Microsoft then proceeded to extort Plaintiffs by demanding an on-the-spot agreement to pay $70,000 or Microsoft would remove all servers containing ALL data and operational software.”

Seguros Universales counters Microsoft’s claim, saying that the raid was “unwarranted” and that it has receipts for over 98% of the software licensing fees–directly challenging the company’s accusation with physical proof. The Guatemalan insurance firm doesn’t stop there, however; they also accuse the software giant of a racketeering scheme that targets companies in the country that use Microsoft’s software.

This isn’t the first case where Microsoft has been accused of similar acts: a Belgian printing by the name of Deckers-Snoeck sued the BSA, citing the unwarranted raid as a cause of the lawsuit. Microsoft had also been involved in the anti-piracy raid against the Belgian printers.

According to the printing company, the raid in Belgium was much like the one that took place in Latin America. Microsoft and the BSA were accompanied by policemen and threatened to take away their computers for the alleged charge of software piracy if they didn’t pay a fine of 30,000 euros ($40,000 USD).

The CEO of the company, Joris Deckers, paid the fine–not to do so would mean he’d have to shut down the company. But he wasn’t about to give up, and sparked off a ten-year legal battle by filing a lawsuit against the BSA as many of the company’s software licenses were in fact valid.

After a decade-long legal debacle, the Brussels Appeals Court agreed upon a ruling: the practices of Microsoft’s and the BSA’s anti-piracy raid was declared as “deceptive”, and Deckers-Snoeck won the case. The Belgian printing company didn’t have to pay any damages to the software giant.

This ruling led to the BSA changing its policy, and now the companies are notified before the raid takes place. More importantly, however, the Decker-Snoeck case opened the door for rulings in similar cases where the companies have legitimate proof of their licenses.

It will be interesting to see what becomes of the case between the Guatemalan insurance agency and the BSA, and whether or not the ruling will affect similar cases in the future, as the Deckers-Snoecker case did.

Via Torrent Freak

Derek Strickland
Derek is an avid fan of gaming and everything geeky, and is compelled to make his mark in the field of games journalism. When he's not gaming on a console (everything from SNES to X360) you can find him reading about ancient civilizations or enjoying a fantasy epic or two.

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