Microsoft Still Claiming That It Can Use The DMCA To Block Competing Xbox Accessories

from the not-what-it-was-designed-for dept

Tue, Jun 21st 2011 7:20am — Mike Masnick

One of the many problems with the DMCA is the way that companies try to abuse it and twist it to stop competition. Thankfully, the courts have been pretty good (but not perfect) about shutting down such attempts, but more companies keep trying. You may recall cases such as the time Lexmark tried and failed to block competing ink cartridges from being used in their printers, by claiming that the cartridge violated the DMCA, by getting around a bit of software whose only purpose was to stop competing printer cartridges. The court correctly realized that this was not at all what the DMCA was supposed to cover. There was a similar case involving garage door openers (though the losers in that case, have figured out a workaround via its terms that effectively allows it to do the same thing).

The latest example of a company trying to abuse the law this way is... Microsoft. We've been following this story for a while. Back in 2009, Microsoft suddenly announced that it would break third party memory cards for the Xbox, basically because it could. This pissed off a lot of people, and kicked off an antitrust lawsuit from Datel one of the third party makers of such cards. That case is now moving forward, with Microsoft arguing there's no antitrust issue, because its merely blocking Datel and others because they're violating the DMCA's anti-circumvention clause, in that third party cards have to get past some software used to block them.

If I had to guess, I'd say Microsoft is going to lose this case. It seems that courts are seeing through attempts to abuse the DMCA when it comes to stopping hardware competition. That's not the case when it comes to software, where things get murkier, but this seems like a pretty obvious attempt by Microsoft to abuse the intent and language of the DMCA solely to stop third party competition of a physical product. Hopefully, the court recognizes this.

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Filed Under: antitrust, competition, storage, xbox
Companies: datel, microsoft

48 Comments

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lavi d (profile), 21 Jun 2011 @ 7:45am

Confounding
Given all the anti-consumer activity from both Microsoft and Sony lately, I find it hard to understand why anyone would buy anything from either of these companies.
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John Doe, 21 Jun 2011 @ 7:48am

Re: Confounding
It is the consumer that holds all the power, just ask Circuit City. I do wish consumers would flex their might more often, we would see businesses being less controlling if for no other reason than they have to be if they want to sell their product.
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aldestrawk (profile), 21 Jun 2011 @ 8:00am

lame tactic
That's pretty lame for Microsoft. They should look to Intel's innovative tactics as an example and change the Xbox to use only proprietary memory cards. New, better, faster memory cards that only Microsoft makes. As a bonus to their users, they could offer a free service to transfer game software to the new type of memory cards.
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jilocasin (profile), 21 Jun 2011 @ 8:01am

Response to Apple RE: DMCA exception iPhone unlocking applicable
It seems to me that the reasoning that made unlocking your iPhone an exemption from the DMCA would be very applicable here. According to Apple you would be violating the DMCA if you unlocked your iPhone to use another carrier (not like you really had much choice in the US) or install and run software unapproved by Apple.

The reasoning, namely that the DMCA anti-circumvention provisions were there to protect a copyrighted work itself rather than as a tool to prevent end users from doing what they would otherwise be legally entitled to do with the hardware they purchased. If you had to copy or otherwise modify a copyrighted work to do so, that didn't run afoul of the DMCA.

Hopefully someone will point to that well thought out response in this case.
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Overcast (profile), 21 Jun 2011 @ 8:07am

I need nothing to block my cash from going towards an Xbox purchase.

I'm so sick of this IP law BS that I'm about ready to just give up on 'media' in general. I'm by nature a gamer, but after my last couple purchases...

I went to Lowe's; bought an extension ladder, paint and started painting my house. I'm finding it much more rewarding than screwing with broken DRM.
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Steve Buchok, 21 Jun 2011 @ 8:08am

Can you tell us what other "anti-consumer" activities Microsoft is doing? Or are you just assuming that they do because everyone else says they do (Same for Sony). As far as I'm concerned, Microsoft makes the Xbox, if they want to put stuff in it to stop other vendors from making peripherals, they are allowed, it's theirs. If the Vendor wants to make sure that their stuff is going to work, get the proper licensing from Microsoft.
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John Doe, 21 Jun 2011 @ 8:14am

Re:
So do you go back to the dealer to get a factory approved muffler, tires, wipers, brakes, etc put on your car or do you source them somewhere else?
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ComputerAddict (profile), 21 Jun 2011 @ 8:16am

Re: lame tactic
What kind of crack are you smoking, and where can I get some :-)
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ComputerAddict (profile), 21 Jun 2011 @ 8:23am

Re: Re:
I'm sure he took it back to the dealer, but they told him that he had last year's model and needs to buy this year's car if he wanted parts that were compatible.

When inquiring whether he could return his car and get a refund they said they were sorry but since he opened the car door he could no longer return it. They did offer however to purchase the car back at 20% of the retail price.

Hesitantly he pulled out his checkbook and bent over.
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AJ, 21 Jun 2011 @ 8:25am

Re:
"Can you tell us what other "anti-consumer" activities Microsoft is doing?"

I'm to lazy to write it all up, but check out the links below. Took all of about 5 minutes to find.

My personal favorite:

"A history of competitive behavior and consumer harm."
http://www.ecis.eu/documents/Finalversion_Consumerchoicepaper.pdf

Other references:

http://en.wikipedia.org/wiki/Criticism_of_Microsoft

http://en.wikipedia.org/wiki/U nited_States_v._Microsoft

http://en.wikipedia.org/wiki/European_Union_Microsoft_competition_case
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AJ, 21 Jun 2011 @ 8:26am

Re: Re:
"A history of anti-competitive behavior and consumer harm."

I haven't finished my coffee yet... sry for the typo..
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Anonymous Coward, 21 Jun 2011 @ 8:28am

So are you saying that cars don't make proprietary parts? Are you also saying that I should get no work done at the dealer when my car is still under warranty? Could going somewhere else void the warranty?

BTW, when did the XBox turn into a car? Again, Microsoft allows third parties to make peripherals, they have to get the proper licensing. How is this a surprise?
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AJ, 21 Jun 2011 @ 8:35am

Re:
Wait.... do you honestly believe your own statement?
"As far as I'm concerned, Microsoft makes the Xbox, if they want to put stuff in it to stop other vendors from making peripherals, they are allowed, it's theirs." ?

You can't be serious!!?? It is absolutely not "theirs". Once i spend my money on it, it's "MINE". If i want to tie a rope to it and use it as a boat anchor, i shouldn't have to worry about Microsoft suing the rope manufacturer just because the rope says "x box/boat anchor conversion kit"...

Think about how hard it would be to get car parts, bicycle parts, computer parts in general..... and just about anything else that can be re-built or modified....
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John Doe, 21 Jun 2011 @ 8:38am

Re:
Auto manufacturers cannot require you to use their parts for warranty claims. So you can get tires, brakes, mufflers, oil filters, etc anywhere you want. Now certain mods can void the warranty which is understandable. Putting a turbo on a 4-banger econobox that was never built for that kind of power should not be something the manufacturer should be on the hook for.

What they also don't do, is license the aftermarket parts. Licensing is purely a tax on competitors/suppliers that adds no value to the market but is in fact a drain on the market because we the consumers will ultimately be the ones paying the license fee.
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AJ, 21 Jun 2011 @ 8:40am

Re:
Really? So nvidia should have to pay dell because their cards will work on a dell computer? I can buy 12 different kinds of scopes and mags for my guns.... do they all pay glock a licensing fee? The tires for my car are made by Michelin, do you think they pay ford for the right to have their tires fit my car?

You can't honestly believe what you're saying..!?
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ComputerAddict (profile), 21 Jun 2011 @ 8:41am

Re:
I suppose you use Ford Factory Certified CD's in your car stereo too...
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crade (profile), 21 Jun 2011 @ 8:43am

I could have sworn the purpose of the anti-circumvention rules *was* to prevent competition.
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crade (profile), 21 Jun 2011 @ 8:46am

Re: Re: Confounding
If the consumer held the power we wouldn't have these problems.
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John Doe, 21 Jun 2011 @ 8:49am

Re: Re: Re: Confounding
But we do hold the power, we just aren't wielding it.
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Steve Buchok, 21 Jun 2011 @ 8:58am

Let's use another analogy. Let's say I have a gun and with this gun is a safety system that doesn't allow me to point it at a human being and fire. Now let's say there is another company that comes by and bypasses this feature so that you can shoot whoever and whatever you like. Does the gun manufacturer have the right to sue the company that bypassed it's security feature? What if there was a license agreement that stated you weren't allowed to do this? What if there were licenses that could be issued for let's say police so that the security was only disabled for them?

Now, I'll try to be a nice guy and say, yes, I see your side but that doesn't mean that there isn't another side to consider. I don't agree with the law suit, but I don't disagree with it either.

Please for the love of god, no more car analogies. Comparing one industry to a completely different industry doesn't make sense. If you want compare XBox with PlayStation or Wii.

Hope I haven't trolled too much. Just trying to make a point.

AJ, when you buy something it is not always yours to do with as you please, look at music.
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Revelati, 21 Jun 2011 @ 8:59am

No one has owned any media or media playback devices in the last 5-10 years. If you read the fine print, you are paying for the privilege of viewing/operating that device, and that privilege can be cancelled at any time for any reason.

In today's world ownership is synonymous with piracy and theft. So I hope you all are learning your lesson because if you think you own that little hunk of technology you have in your hand right now you are a dirty, dirty, pirate...
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Michael Donnelly (profile), 21 Jun 2011 @ 9:05am

DMCA argument may be moot.
Microsoft is also claiming that Datel copied the "authentication" code, byte-for-byte, from Microsoft's own hardware.

Up to this point, Datel has been very resistant to discovery requests regarding that code. If it turns out to be true, then they'll likely lose handily. It won't set a bad DMCA precedent, but it's a shame for consumers.

Wired is hosting a copy of Microsoft's motion to compel discovery, which contains all kinds of neat bits regarding the reversing (or lack thereof) of the handshake code in the peripherals:

http://www.wired.com/images_blogs/threatlevel/2011/06/microsftdatelcounter.pdf

Wi th any luck, this will turn out to be just noise and Datel will prevail on the DMCA claim fair and square.
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Anonymous Coward, 21 Jun 2011 @ 9:05am

Re:
troll fail

Nice try Mr Ballimer. I mean, Mr "Buchok".

Once I buy an XBox, it's mine, not Microsoft's.
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E. Zachary Knight (profile), 21 Jun 2011 @ 9:08am

Re:
I think you don't understand this case.

Microsoft makes the XBox 360. They have a proprietary memory card that holds 512 MB of data.

Datel thought this was not enough for gamers and made a Memory card that lets the user use their own SD cards so they could hold up to 64 GB of data.

Microsoft saw that this competed with their proprietary hard drive system making it obsolete and pushed a firmware update to block all 3rd party memory cards.

Microsoft saw a competing product that was better and cheaper than their proprietary solution. Instead of competing by introducing a better product, they abused the DMCA.

Your gun argument does not match the actual issue. A better gun analogy would be one mentioned above where a competing accessory maker makes a better scope than the gun maker and the gun maker changes the gun to make the scope useless.
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Anonymous Coward, 21 Jun 2011 @ 9:08am

Re:
Troll fail #2

Step 1 "Let's use another analogy. Let's say I have a gun and with this gun is a safety system that doesn't allow me to point it at a human being and fire."

Step 2 "Comparing one industry to a completely different industry doesn't make sense."

Step 3 ???

Step 4 Profit
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Anonymous Coward, 21 Jun 2011 @ 9:23am

Re: Re: Re: Confounding
The power is in your wallet. Don't like sony? then don't buy anything sony. The issue is that everybody thinks like this: "it's just one more playstation, what difference does it make?"
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AJ, 21 Jun 2011 @ 9:28am

Re: DMCA argument may be moot.
Back to the car thing... imagine what's going to happen when every part has a tiny piece of electronics that contains some kind of security in order to make that part work with a car.... you could design a car that you couldn't get parts for...... but really, at the end of the day, would anyone buy it?

I find it funny that Microsoft is making their own products less valuable, by limiting the consumer choice, in the name of greed.
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A.R.M. (profile), 21 Jun 2011 @ 9:29am

Re: Confounding
As a recent buyer of the XBox 360, I was well aware of the lawsuit before my purchase. Why did I buy? Because this doesn't affect me as I don't use memory cards.

However, I will like to offer my past experiences on why I'm on the fence with Microsoft's decision.

Years ago, back when the PS2 and GCN were king, memory cards flooded the market. For $2.99, one could easily have an abundant source of memory storage... for a limited time, until they failed.

And fail they did. As a consumer, I had simply believed the price of memory had come down and wasn't being used against us to sell cheap memory cards when the difference in price came down to a few cents to a dollar or more (company specific).

Granted, we're only talking about game data, but it's significant more now than ever before. Data wiped out in an instant all because companies like Datel, who probably manufacture under different names, screw consumers.

The entire point of licensing is to allow the console maker the ability to instill trust to the consumer. It's no guarantee, of course, as even name brands can fail, but there's a much better comfort level I feel if I know Microsoft at least viewed the product in hand and gave it a "thumbs up".

Yes, there are licensing fees attached, but in a world where people are paying $60+ for a game, I don't think a few cents more will make a difference overall.
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ComputerAddict (profile), 21 Jun 2011 @ 9:35am

Re:
"Does the gun manufacturer have the right to sue the company that bypassed it's security feature?"

Umm. No... Because nothing wrong has been done yet. The Manufacturer made a gun, Company B made a widget. They have no business relationship. No deals to be broken. Company B may have never even owned a gun from the manufacturer.

"What if there was a license agreement that stated you weren't allowed to do this?"

I'm not sure why company B would sign a license agreement that said they couldn't manufacture their own product...

If it was a license agreement between the owner and the gun Manufacturer I would say that it better be in writing, witnessed and signed by a notary at the time of purchase. clearly stating that you are not BUYING a gun you are LICENSING a gun... which IMO puts a lot of liability on the gun manufacturer when the licensee shoots someone with the MANUFACTURER's GUN.
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Anonymous Coward, 21 Jun 2011 @ 9:36am

Re: Re: DMCA argument may be moot.
Sony would make that car.
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crade (profile), 21 Jun 2011 @ 9:53am

Re: Re: Re: Re: Confounding
theres no law against not buying sony yet? It'll come.
In the mean time, it's still like voting for a turd sandwich or a giant douch. I don't like Sony, Microsoft or Nintendo, but I like the companies that actually make the games. :(
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Anonymous Coward, 21 Jun 2011 @ 10:03am

Re:
The xbox is not microsoft's, it is mine after I purchase it. I can do what I want with it.
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Anonymous Coward, 21 Jun 2011 @ 10:11am

Re: Re: Re: Re: Re: Confounding
game on pc? with linux (?)...
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Killer_Tofu (profile), 21 Jun 2011 @ 10:15am

Re: Re: Confounding
Microsoft should have no say in third party hardware. When people buy it, they understand it is third party. Microsoft could charge the hardware vendors something to give them a seal of approval if that is what you really want. But in no way shape or form should they be allowed absolute control.

Aside from being monopolistic, this is the digital age. People will spread the word using this thing we have called the internet pretty quickly if a memory card is of bad quality. All it would take is five minutes worth of searching to see which manufacturers memory cards were not worth buying.

If there was no such thing as the internet, I might believe your point more. As it stands I find it easy to find information on products very quickly. Thanks to that easy to find information I see no reason to give Microsoft any form of control over what third party hardware should be allowed. As I said, they could always sell a seal of approval if they wanted to. If not, I don't really care. Companies have too much control and that needs to end.
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Anonymous Coward, 21 Jun 2011 @ 10:21am

Re: Re: Confounding
Just try to add a Hard Drive to the 360 Slim though.
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crade (profile), 21 Jun 2011 @ 10:37am

Re: Re: Re: Re: Re: Re: Confounding
Yeah, you can, maintaining a PC as a gaming system is costs a fortune and is such a pain PCs have so many variables that will go wrong and make my life hell. It makes sense to have a standardized platform that the game has actually been tested on, there just aren't any choices for that that don't come with a mandatory screwing.
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HothMonster, 21 Jun 2011 @ 10:39am

This has bugged me for a long time. The charge 4x the market value for their xbox hdd, which is just a blue scorpio WD hdd in a fancy case you can buy from china for 1$(literally 1$ from china). Then someone comes along allowing you to use usb storage (at this point the 360 will not recognize a standard flash drive) at a competitive market price, rather than compete they block the product. Datel sues them, the court rules they can not block the product until the suit is over.

So what does M$ do? They take the restrictions off the usb ports so you can stick any usb storage in and it will work, including an old plain cheap usb flash drive, which in effect makes the Datel product worthless because you no longer need a specilized usb storage device. But you know if M$ wins this case the first thing they will do is put the restriction back on the port only allowing their overpriced HDD to work.

And to the guy who keeps saying get a license and microsoft license for peripherals: They NEVER allowed anyone to license storage devices for 360. There where two options their official HDD and their offical memory stick. Back when they sold the 120GB drive for >200 dollars you know what the difference was between that HDD and a 60 dollar Western Digital drive? About 16 bits of code that basically just say, "hi 360, you can let me work because the customer paid wAAAAAAy too much for me, cause they are stupid and we are greeedy, cheers xbox-HDD." They could not do this if they allowed anyone to undercut them, which anyone they licenced could because as I keep saying they are selling these drives at triple(or more at times) consumer market value for the parts(really; part) included. So thats not 3x margin, that is 3x consumer retail value, lord knows what kinda ridiculous profit margin they had from these.

And still to this day they are charging ~3x the market value because of that little bit of code. Its 130 for their HDD, the western digital blue scorpio (the drive that is in there) is about 40 bucks now. So i guess they have come down from the 4x and 5x market value it used to cost, I guess we should be thankful.
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hmm (profile), 21 Jun 2011 @ 10:49am

in 5..4.3..
I'm waiting for Microsoft to claim that what they are doing is fair:
after all, if microsoft wants to add a security layer designed to block use of third party memory cards with THEIR product, then Datel is perfectly entitled to do the same thing back and create a security layer in IT'S memory card products, designed to block third party hardware (i.e. the xbox)......

Circular (critically retarded) logic FTW!
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PRMan, 21 Jun 2011 @ 12:24pm

Re: Re:
Yeah, the problem is that they don't have my favorite new artist. I guess it's time to buy a Chevy.
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crade (profile), 21 Jun 2011 @ 12:28pm

Re: lame tactic
How is that innovative? Everyone does that thats why every stupid device has their own proprietary version of everything under the sun that was better than the other guys at one thing for 30 seconds at one point.
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crade (profile), 21 Jun 2011 @ 12:37pm

Re:
lol, it sounds like the IP law BS is enriching your life :)
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crade (profile), 21 Jun 2011 @ 12:41pm

Re: Re:
man, those were the days.
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Rikuo (profile), 21 Jun 2011 @ 1:09pm

Re:
What fine print? Not once in my life have I ever had print, fine or not, to look at when purchasing media or media playback devices...
Oh wait. You meant AFTER I bought it. So, I buy a PS3 with cash and sign nothing, that is advertised as supporting Linux, but afterwards, it is stripped away. I buy an Xbox with cash, sign nothing, but suddenly the Datel memory card I bought no longer works (btw, I had a third party memory card for three years for my PS2, never once failed me).
Press X to Agree to the Terms and Conditions IS NOT A CONTRACT. There is no license if I'm not sat down, and asked to sign a document with a witness. What if, I buy the latest game, read the T & C, and find out one of the conditions of use is that I have to give them my car? Or some other outlandish term? I can't return the game, I've already opened it, thus I'm out of cash, because I was not shown the T & C beforehand.
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AJ, 21 Jun 2011 @ 2:41pm

Re:
WTH? Your comparing x boxes with the music industry, how does that make any since? Music is licensed, the xbox is a physical thing. When i buy music, i buy the right to listen to the music, when i buy an an x box, i bought a friggin x box, not the right to play the x box...
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Casey Bouch (profile), 21 Jun 2011 @ 6:39pm

Re: Re: Re: Re: Re: Re: Re: Confounding
Computers are less of a fortune when you consider it's other uses. Just add the cost of a console and it's accessories to the cost of a computer you would have bought anyway.
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Anonymous Coward, 21 Jun 2011 @ 6:42pm

Do Not Buy Crippled Stuff
Boys and girls, it's simple. Do not buy any product which has been designed to be deliberately defective. If it is a computer (which any Xbox is), you can reasonably expect it will drive standard peripherals. If the manufacturer deliberately prevents standard peripherals from working, but sells overpriced custom peripherals, then you are being gouged. The product is intentionally crippled. The supplier is not giving you the best possible product at the lowest possible price. As a consumer, you should punish such behavior in the marketplace by declining to buy. If you do not have the brains or the determination to defend your own interests, you can expect to be exploited.

All these people here who are complaining that their Xbox does not do this or that, have committed the fundamental mistake of buying an Xbox in the first place, without considering the fact that it was crippled. Do not give the suppliers of crippled stuff the favor of your custom. Buy only from manufacturers who do respect your rights. There are plenty out there.
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aldestrawk (profile), 21 Jun 2011 @ 6:46pm

Re: Re: lame tactic
I guess I should have labelled this with a sarcasm emblem.
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Anonymous Coward, 22 Jun 2011 @ 2:44am

This is another reason why I stopped using Window$ and switched to GNU/Linux.
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