Mass market computers: bundled sales in court, the turning of the tide

Paris, June 24, 2008

The judgement published today June 24, 2008, by Paris high court [1] in the case UFC-Que Choisir vs. Darty -- a consumers' association against a household appliance and computing retail chain -- is probably not the clear decision about bundled sales expected by the complainant and Free software associations. Despite an apparent disadvantage -- the retailer is confirmed to be entitled to sell software and computer bundles -- the decision agrees with two claims of tied sales opponents. This judgement could lead to more radical changes than may be apparent at first.

Retailers can sell software and computer bundles but...

UFC-Que Choisir's request suggests that they wanted computers to be sold without preinstalled operating system from now on. The consumers' association's request was not followed by judges not up on computing. They prefered to trust Darty's expert report about the difficulty to install Linux, than UFC's report about the ease of installing Linux. In fact, Linux and Windows installation on a personal computer are currently of equal difficulty or equal easiness [2].

With such groundworks, the debate about the alleged "consumer's sake" was totally biased and we can only deplore the successive rough arguments which ground the decision. According to the judgment, the law allows bundled sales for legitimate purpose such as for the consumer's sake. We searched jurisprudence for the articles mentionning such an exception, in vain. Moreover, consumer's sake is evaluated only on the basis of the availability of a computer ready to use, without any hold about context, notably about competition and aftermathes for the consumer. The court made no comprehensive appraisal about the sake of all the consumers, other than mentioning that computer sales without software exist in other shops. Yet this is fallacious at least for laptops, for which the prices are prohibitive because of workforce costs. Hence such products cannot compete with mass market products.

But the scope of this part of the decision is not so important as it seems, because it must be considered in relation with the request: Darty is not condemned to sell "naked" computers. But nowhere does it say that Darty is authorized to keep forcing software buying with hardware. The subtlety lies in the difference between pre-installation and pre-activation that, unfortunately, did not surface during the hearing. The impact of the remaining of the sentence must be appreciated with this in mind.

Stage 1: Software and hardware are indeed distinct products

The first point one should celebrate is that the court dismisses the idea that software and hardware should constitute a unique product simply because they are complementary. For this purpose, it uses the analogy, used so many times by retailers: even though a motor cannot be substituted with another, several pieces of software perfectly well suited for a computer can be found on the market.

It is the major point of this judgement.

Stage 2: imposed distinct price listing

Darty was condemned to display the software prices, which is revolutionary. For the first time, consumers will be able to realize the real price of pre-installed software, i.e., to precisely know the price they pay for Microsoft Windows and for other utilities when buying a new computer. Once this has been realized, the consumers' choices and expectations will not be the same any more. Competitors will now start coming up in the field of market micro-computing.

This obligation to display prices separately will also ease the refund claims of unwanted software, known as racketware, as trials become numerous [3]. Thus, this judgment is a basis to prepare further victories arising from the refund howto [4].

Stage 3: Soon, optionality

Moreover, the sentence will have huge consequences through this aspect during the next scheduled events, in particular the meeting with DGCCRF on July 3rd and the next two trials initiated by UFC-Que Choisir (against manufacturer Hewlett Packard and against retailer Auchan Bagnolet). As recalled by DGCCRF herself in her 2005 Response of General Interest [5], selling different products as a bundle implies the obligation to commercialize separately, in the same place, each element of the bundle. Quite logically, one cannot imagine that once distinct prices are displayed, the consumer will not be able to choose one or the other part of the bundle, whether software or hardware.

Hence, the entire bundled-sales ecosystem is challenged, with its opacity of prices and licence terms. Cornered by the necessity to sell separate elements and the wish to sell computers "ready to use", retailers will have no other choice than optionality [6].

References

1. Judgment UFC Que Choisir-Darty on June 24, 2008 (PDF, 2.5 Mb).
2. AFUL: Low cost Netbooks worldwide.
3. Consumption: Towards a multiplication of trials for the refund of Racketware in France: After the third trial won by a private individual, the French associations AFUL, April, UFC-QueChoisir and CLCV are calling for a multiplication of refund procedures for software imposed when buying a new computer. A refund guide is made available, dedicated to French consumption laws.
4. Racketware team: Refund Guide.
5. DGCCRF: Response of General Interest (2005).
6. Racketware team: Our requests: software optionality, price transparency, information and competition.

About AFUL (www.aful.org)

The French speaking Linux and Libre Software Users' Association (AFUL), AFUL aims to promote libre software and the use of open standards. AFUL is a non-profit association that gathers users, professionals, companies and other associations based in more than a dozen French-speaking countries and regions (France, Belgium, Switzerland, Quebec, French-speaking African countries, etc.).

Partner of many media, AFUL is present at many exhibitions, conferences and meetings. In particular, it has an active role against bundled sales (Workgroup against bundled sales, racketiciel.info petition, comparative list bons-vendeurs-ordinateurs.info of computer vendors), in favor of interoperability (member of AFNOR, participation to Interoperability and accessibility Referentials by DGME, formats-ouverts.org website, etc.), as well as on issues concerning Author Copyrights.

Press contacts:

• Alain Coulais, representing the Workgroup against bundled sales, alain.coulais@aful.org +33 (0)6 20 61 43 66
• Press contact - AFUL: presse@aful.org