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Bundling of Microsoft Windows

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Installation of Microsoft Windows in computers before their purchase

The bundling of Microsoft Windows is the installation of Microsoft Windows in computers before their purchase. Microsoft encourages original equipment manufacturers (OEMs) of personal computers to include Windows licenses, OEM software (including bloatware) and OEM drivers with their products, and agreements between Microsoft and OEMs have undergone antitrust scrutiny. Users opposed to the bundling of Microsoft Windows, including Linux users, have sought refunds for Windows licenses, arguing that the Windows end-user license agreement entitles them to return unused Windows licenses for a cash refund.[1] Although some customers have successfully obtained payments (in some cases after litigation or lengthy negotiations), others have been less successful.[2]

The "Windows tax"<br>[edit]

Microsoft encourages original equipment manufacturers (OEMs) to supply computers with Windows pre-installed,[3] saying that purchasers benefit by not having to install an operating system.[4] Analyst Vishal Tripathi said that many people purchase PCs with pre-installed operating systems because they do not want to deal with the "learning curve" and inconvenience of installing an operating system.[5] Virtually all large computer vendors bundle Microsoft Windows with the majority of the personal computers in their ranges. In 1999, Maximum PC wrote that non-Windows users "have long griped that machines from large companies can't be purchased without Windows".[6] In 1999, analyst Rob Enderle attributed the lack of computers without Windows available for individual purchase to economic impracticality, citing certification and warranty requirements.[6] In 1999, Dell stated that it only offered non-Microsoft operating systems on servers and as part of customized large orders, but if Linux became popular enough to make Linux pre-installation cost-effective, "we'd be foolish not to offer it".[6] The Guardian's computer editor Jack Schofield claimed that there were significant cost overheads associated with preinstalling Linux, in part due to Linux's small market share,[7] although Schofield had generally viewed Microsoft's bundling practices favourably, claiming in 1995 that Microsoft's incentives were not unlike promotional deals in other industries and that "Microsoft cannot be accused of beating PC manufacturers with a stick: at worst it is beating them with a carrot",[8] despite the well-established competitive impact of such practices on suppliers of competing systems software, acknowledged in a 1994 settlement with Novell.[9]: 208  Serdar Yegulalp of Computerworld said that in the late 1990s, because Linux was not fully developed, Linux computers were "a tough sell for non-technical users".[10]

Microsoft historically engaged in licensing practices that discouraged the installation of non-Microsoft operating systems. Microsoft once assessed license fees based on the number of computers an OEM sold, regardless of whether a Windows license was included. Beginning in 1983, Microsoft sold MS-DOS licenses to OEMs on an individually negotiated basis. The contracts required OEMs to purchase a number of MS-DOS licenses equal to or greater than the number of computers sold, with the result of zero marginal cost for OEMs to include MS-DOS. Installing an operating system other than MS-DOS would effectively require double payment of operating system royalties. Also, Microsoft penalized OEMs that installed alternative operating systems by making their license terms less favorable.[11]: 165–66  Microsoft entered into a consent decree in 1994 that barred them from conditioning the availability of Windows licenses or varying their prices based on whether OEMs distributed other operating systems.[12] Microsoft General Counsel Brad Smith said that the decree was effective in allowing Dell and HP to offer Linux computers,[13] and Jeremy Reimer of Ars Technica stated that the decree made it "fiscally realistic to sell computers with alternative operating systems".[12] In 1999, a Microsoft representative stated that their contracts with OEMs did not "stop any OEM from shipping any operating system on their PCs".[1] In 2010, Microsoft stated that its agreements with OEMs to distribute Windows are nonexclusive, and OEMs are free to distribute computers with a different operating system or without any operating system.[4] In a 2001 article in Byte, it was reported that license agreements between OEMs and Microsoft forbade OEMs from including Windows alongside another operating system on the same computer.[14] According to a 1999 New York Times article, "critics assert that the company continues to use its market clout to ensure...