Corporate & Securities Law

Datel sues Microsoft over XBOX lockout. Kodak for tethered appliances?

By Hanno Kaiser

Here is an interesting complaint, in which Datel alleges that MSFT retroactively disabled Datel’s memory cards for the XBOX 360 to protect MSFT’s own aftermarket sales. The primary claims are monopolization of the aftermarket for XBOX accessories and tying, based on (i) total manufacturer control of the aftermarket and (ii) a > 50% share of the equipment market (which excludes the Wii). Among the most notable allegations is the ex post modification of the XBOX by way of a required, downloadable “dashboard upgrade,” which could make the traditional ex ante lifecycle pricing counter argument somewhat challenging. More generally, this is a case addressing the “tethered appliances” problem that Jonathan Zittrain develops in The Future of the Internet in the context of antitrust/consumer protection.

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Full post as published by Antitrust Review on November 24, 2009 (boomark / email).