Solved Microsoft is Misleading Consumers With Windows 8.1 System

jpolacko

The fly on the wall
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Now I'm running Win 8.1 OEM Builder. Should I continue to run this version as I'm in violation of Windows license agreement ?


"If you’ve purchased a “System Builder” OEM copy of Windows 8.1 from Amazon, Newegg, or another online retailer, you’re probably violating the Windows license agreement. That means you technically have a “non-genuine” copy of Windows.
Microsoft is misleading consumers here. This was a problem in the past, so Microsoft fixed the licensing problem in Windows 8. But — surprise! — they’re back to their usual tricks with Windows 8.1."

Here's the link to the story I got in my Email.

Microsoft is Misleading Consumers With Windows 8.1 System Builder Licensing
 

My Computer

System One

  • OS
    Microsoft Windows 10 Pro 64-bit
    Computer type
    Laptop
    System Manufacturer/Model
    HP Pavilion DV6
    CPU
    Intel(R) Core(TM) i5 CPU M 460 @ 2.53GHz
    Motherboard
    Hewlett-Packard 144C
    Memory
    6 GB soon to be 8 GB
    Graphics Card(s)
    Intel(R) HD Graphics (Core i5)
    Sound Card
    IDT High Definition Audio CODEC
    Screen Resolution
    1366 x 768 x 32 bits (4294967296 colors) @ 60 Hz
    Hard Drives
    1 TB Samsung HDD and Samsung 600 GB SSD
    Case
    HP metal case.
    Cooling
    Standard fan ( Does a good enough job)
    Keyboard
    HP backlit keyboard.
    Mouse
    Standard USB Mouse
    Internet Speed
    60 Mbps Download and 10 Mbps Upload thru Charter High Speed Internet
    Browser
    Firefox and Internet Explorer
    Antivirus
    Norton Internet Security
    Other Info
    Custom Built Windows Server 2008 R2 used for storage server, DHCP server, Primary DNS server. Novell Suse Server running 2 custom built desktop that have Novell Netware installed. Samsung Note 3 (Primary Phone) and Samsung S4 (Back up phone).
Yes, sneaky... they changed the fine print ...

Changes in Windows 8 Retail License
In our continued effort to simplify the number of SKUs at retail and prevent customer confusion, Microsoft has made some changes to Windows 8.1 licensing:
1. The full version FPP (fully packaged product) is the sole retail offering in the retail channel. This addresses the greatest number of consumer scenarios (upgrading from previous versions of Windows, installing Windows 8.1 on a Mac, virtual machine, or buildin g a PC from scratch).
2. The DIY (personal use rights) addendum has been removed from COEM product. Microsoft will carry the OEM EULA only and revert COEM product for exclusive use by System Builders, which is the product’s historical intention.
3. Windows 8.1 COEM product now has a single EULA, rather than two.

Changes in Windows 8.1 System Builder License
COEM is still the product that system builders will license for systems they build and sell.
  • System Builder product may only be used to preinstall as the operating system on a PC you build to sell to an end user.
  • System Builder product may not be used as an upgrade license to an existing underlying Windows operating system.
With the Windows 8.1 System Builder product, you:
  • Can do only clean installs for new PCs (no upgrades).
  • Will not be able to keep settings, files, or user preferences as it is a clean install.
  • Should not display on retail shelf as there’s no retail packaging.
  • Must provide support for end users who purchase this product preinstalled on your systems; they will not be able to get customer
  • support from Microsoft directly.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
I don't know how sneaky it was since they made this change a couple years ago and it's your responsibility as the end user to read the EULA before agreeing to it.

Now what's "sneaky" is when they throw in these "subject to change without notice" clauses where Large Company X is free to alter the terms of the deal basically at any time they want, whereas you are left with the choice to either bend over and take it or find something else. So then they will update the terms to say Xbox Live for Xbox 360/One owners and say that if you keep using the service (you paid for in advance) you're agreeing to these new terms. So basically either you accept their new terms or at the bare minimum you eat however much you paid in advance for Xbox Live service. You also lose the ability to play games multi-player and will gradually lose the ability to play new games that may depend on some specific version of the console firmware be installed.

Bit of a rant here, but I'd love to see someone take the text file that installers read in, modify it so that they can basically do whatever they want, and then run the installer where they agree to this modified license. At least in the US, you are free to cross out bits of a contract or modify it in pretty much any way before you sign. Since software companies have delegated their signing authority to a program, which is erroneously based on the assumption that no one will exercise their rights to modify the contract terms prior to agreeing/signing, with the usual IANAL disclaimer, I'd say the company is stuck honoring those terms. Granted as soon as someone did this they'd just embed the EULA text inside the installer binary and encrypt it so you can't just use a hex editor to change it, but it'd be hilarious to watch. I'd also like to see someone challenge these click-through licenses on the grounds that the fundamental premise of a contract is that there's a meeting of the minds. All parties are on equal footing. So, try arguing that a team of lawyers who created a document near indecipherable probably even to other lawyers, is somehow a meeting of the minds with Joe Average. Plus companies are actively denying the opposite party their legal right to modify the terms of the contract prior to signing. Even better would be to get someone who's under the legal age for entering into a binding contract to be the one to click the agree button.

But there's nothing particularly sneaky or misleading about changing the terms to the EULA like was done. The OEM version of Windows was always intended to be for people who build and SELL computers, not just build their own for personal use. People were taking advantage of a loophole in the EULA language and Microsoft finally got around to closing it.
 

My Computer

System One

  • OS
    8.1
Yes, sneaky... they changed the fine print ...

Changes in Windows 8 Retail License
In our continued effort to simplify the number of SKUs at retail and prevent customer confusion, Microsoft has made some changes to Windows 8.1 licensing:
1. The full version FPP (fully packaged product) is the sole retail offering in the retail channel. This addresses the greatest number of consumer scenarios (upgrading from previous versions of Windows, installing Windows 8.1 on a Mac, virtual machine, or buildin g a PC from scratch).
2. The DIY (personal use rights) addendum has been removed from COEM product. Microsoft will carry the OEM EULA only and revert COEM product for exclusive use by System Builders, which is the product’s historical intention.
3. Windows 8.1 COEM product now has a single EULA, rather than two.

Changes in Windows 8.1 System Builder License
COEM is still the product that system builders will license for systems they build and sell.
  • System Builder product may only be used to preinstall as the operating system on a PC you build to sell to an end user.
  • System Builder product may not be used as an upgrade license to an existing underlying Windows operating system.
With the Windows 8.1 System Builder product, you:
  • Can do only clean installs for new PCs (no upgrades).
  • Will not be able to keep settings, files, or user preferences as it is a clean install.
  • Should not display on retail shelf as there’s no retail packaging.
  • Must provide support for end users who purchase this product preinstalled on your systems; they will not be able to get customer
  • support from Microsoft directly.

Agreed but they allowed personal builds with Windows 7 and Windows 8 but with Windows 8.1 they aren't allowing it. It's all good though I will wait til Windows 10 comes out next year and buy it stright. But on another note they did not state it wasn't allowed for personal use when I bought it.
 

My Computer

System One

  • OS
    Microsoft Windows 10 Pro 64-bit
    Computer type
    Laptop
    System Manufacturer/Model
    HP Pavilion DV6
    CPU
    Intel(R) Core(TM) i5 CPU M 460 @ 2.53GHz
    Motherboard
    Hewlett-Packard 144C
    Memory
    6 GB soon to be 8 GB
    Graphics Card(s)
    Intel(R) HD Graphics (Core i5)
    Sound Card
    IDT High Definition Audio CODEC
    Screen Resolution
    1366 x 768 x 32 bits (4294967296 colors) @ 60 Hz
    Hard Drives
    1 TB Samsung HDD and Samsung 600 GB SSD
    Case
    HP metal case.
    Cooling
    Standard fan ( Does a good enough job)
    Keyboard
    HP backlit keyboard.
    Mouse
    Standard USB Mouse
    Internet Speed
    60 Mbps Download and 10 Mbps Upload thru Charter High Speed Internet
    Browser
    Firefox and Internet Explorer
    Antivirus
    Norton Internet Security
    Other Info
    Custom Built Windows Server 2008 R2 used for storage server, DHCP server, Primary DNS server. Novell Suse Server running 2 custom built desktop that have Novell Netware installed. Samsung Note 3 (Primary Phone) and Samsung S4 (Back up phone).
But there's nothing particularly sneaky or misleading about changing the terms to the EULA like was done. The OEM version of Windows was always intended to be for people who build and SELL computers, not just build their own for personal use. People were taking advantage of a loophole in the EULA language and Microsoft finally got around to closing it.

How can an explicit personal use rights clause be a "loophole" ?

No-one expects a EULA change in what is essentially an upgrade - that is sneaky.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
No-one expects a EULA change in what is essentially an upgrade - that is sneaky.

It's not. Say you have an old OEM copy of XP from before the EULA changed. It's still subject to the old terms where it was generally allowed. If you bought a copy of the XP OEM version towards the tail end, after the EULA change, you're screwed.

Now, if you wanted to say something about how difficult it can be to get a refund for unused software -- like if you didn't agree with the terms of the EULA -- I can fully support you. It's kind of a catch-22, because Microsoft will tell you to get a refund from the seller, the seller will undoubtedly have terms which say no refunds on opened software no exceptions, but that is in direct violation of the EULA terms which state you are entitled to a refund as long as you never activated the software. So you run around in circles and most people will eventually decide that it'd take too long and too much effort for the $100 or whatever they're out. At the very least, Microsoft should be willing to order the reseller to cough up the refund or offer the refund to you directly and then go after the reseller to recoup their expenses.

Still... Changing the EULA on new copies of Windows being sold, be it a new major version (e.g. Windows 8) or changing the terms on copies being sold after a specific date... There's nothing at all sneaky or underhanded about that. The latter situation can lead to a lot of confusion and pissed off customers, but it's not sneaky or underhanded in any way. If say tomorrow you had to accept a modified EULA to receive something like the 8.1 Update 1 patch, which all future security updates will depend on... THAT would be sneaky and underhanded, effectively changing the rules of the game mid-way through through extortion. But when you're installing something for the first time and you don't read that big long boring bit of legal text, that is on you.
 

My Computer

System One

  • OS
    8.1
Well regardless they did not state not for personal use when I bought the software a few months back. I don't believe they will deactivate my key. But I can't wait for Windows 10 comes out looks pretty sweet from the preview!!
 

My Computer

System One

  • OS
    Microsoft Windows 10 Pro 64-bit
    Computer type
    Laptop
    System Manufacturer/Model
    HP Pavilion DV6
    CPU
    Intel(R) Core(TM) i5 CPU M 460 @ 2.53GHz
    Motherboard
    Hewlett-Packard 144C
    Memory
    6 GB soon to be 8 GB
    Graphics Card(s)
    Intel(R) HD Graphics (Core i5)
    Sound Card
    IDT High Definition Audio CODEC
    Screen Resolution
    1366 x 768 x 32 bits (4294967296 colors) @ 60 Hz
    Hard Drives
    1 TB Samsung HDD and Samsung 600 GB SSD
    Case
    HP metal case.
    Cooling
    Standard fan ( Does a good enough job)
    Keyboard
    HP backlit keyboard.
    Mouse
    Standard USB Mouse
    Internet Speed
    60 Mbps Download and 10 Mbps Upload thru Charter High Speed Internet
    Browser
    Firefox and Internet Explorer
    Antivirus
    Norton Internet Security
    Other Info
    Custom Built Windows Server 2008 R2 used for storage server, DHCP server, Primary DNS server. Novell Suse Server running 2 custom built desktop that have Novell Netware installed. Samsung Note 3 (Primary Phone) and Samsung S4 (Back up phone).
I still think it's ridiculous to expect a system builder to support their customers by having to purchase a retail licence.

Anyway, I have checked the supported keys in Windows 10, and it seems promising - Windows 8.0 and Windows 8.1 keys are accepted for that edition - I tested Pro Retail and OEM incl. system builder (OEM: Non-SLP) - hopefully they will activate as well.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
And they wonder why people work around their stupid crap license agreements. As far as that goes they don't know if you actually sell the self built PC or not so it really means nothing.
 

My Computer

System One

  • OS
    Windows 8
Well regardless they did not state not for personal use when I bought the software a few months back. I don't believe they will deactivate my key. But I can't wait for Windows 10 comes out looks pretty sweet from the preview!!

It's in the EULA that you have to agree to before the software installs. Which is why I'm all in favor of there being some kind of overhaul of how people can get refunds for software where you go to install it, read the EULA, say "Screw this!", and want to get a refund. However, failing to read the EULA before installing I can't put on anyone other than the person who failed to read it. Be it me, you, or anyone else.

I still think it's ridiculous to expect a system builder to support their customers by having to purchase a retail licence.

You don't. Part of the reason the OEM license is so cheap is Microsoft isn't going to support it, you are as the system builder. The retail license comes with support from Microsoft, though I can't say as I have ever known anyone who actually took advantage of that. It's all spelled out in the final point of the bit you quoted above.

With the Windows 8.1 System Builder product, you: [...] Must provide support for end users who purchase this product preinstalled on your systems; they will not be able to get customer support from Microsoft directly.

That seems pretty clear and straightforward to me.
 

My Computer

System One

  • OS
    8.1
And they wonder why people work around their stupid crap license agreements. As far as that goes they don't know if you actually sell the self built PC or not so it really means nothing.

While true, it's in violation of the EULA so technically it's a pirated copy if you're using it for your own personal system. We can disagree with the motivations and think it's a stupid idea all we want, the facts are still the same.
 

My Computer

System One

  • OS
    8.1
And they wonder why people work around their stupid crap license agreements. As far as that goes they don't know if you actually sell the self built PC or not so it really means nothing.

Yup, an unenforceable law is useless... Dunno what they hope to achieve with that.

Why not get system builders to register as resellers before supplying goods...? like AMD, Intel etc...instead of confusing the public by making it available via retail channels.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
Because if they did that, people would complain about how they have to jump through this or that hoop and it's some kind of artificial barrier to enter the market that is at the behest of the big name companies like Dell, HP, etc. And of course if they didn't offer it at all, it's the same basic arguments. They're doing it on behalf of large OEMs who don't want any competition, they want to force people into buying more expensive copies of Windows, you name a crackpot theory, someone will claim it to be the unvarnished truth.
 

My Computer

System One

  • OS
    8.1
I'll just build a system, install an OEM copy as I always have. Then buy it from myself for a dollar just as always.

That way I am fully in compliance with the EULA.
 

My Computer

System One

  • OS
    Windows 8
I'll just build a system, install an OEM copy as I always have. Then buy it from myself for a dollar just as always.

That way I am fully in compliance with the EULA.

At least in the US, I wouldn't expect that argument to hold any water in court if Microsoft ever decided to press the issue. It would probably backfire on you as a matter of fact. The EULA says you have to sell it to an end user and I would imagine any judge would take a rather dim view of you trying to claim you sold something to yourself. Generally speaking, that's fraud. Microsoft's lawyers argue that from the very beginning you intended the computer to be for your own personal use and that you were full cognizant of the prohibitions in the EULA on doing so. So on top of breach of contract they could probably tack on fraud and copyright violation.

The only way I could see you having a prayer is if you do computer building professionally and are incorporated in whatever state you live in (assuming you live in the US). Then used corporate funds for all the hardware and software purchases then selling the system to yourself and paying for it with personal money. However, the taxes you'd pay as a corporate entity would far and away surpass any savings on this OEM version of Windows vs just buying the retail version. Plus you could potentially open yourself up to other legal issues for giving yourself, effectively the CEO of your company, a sweetheart deal using corporate funds. You're not allowed, even though it happens all the time, to use company funds for your own personal gain. You can pay yourself a salary, but that's it. Otherwise, in the hypothetical scenario where Microsoft comes after you, they could tip off the IRS and state tax collection agency that they may want to audit your tax filings, both personal and corporate.
 

My Computer

System One

  • OS
    8.1
There are legal ways around that.
For instance, a sole proprietor can setup a loan account where you are, in effect, providing yourself finance/goods under very favourable conditions.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
I'm not arguing the point that it can be done, rather that after all the hoops you have to jump through to be fully compliant with applicable laws, how much time have you spent on it? Then how much do you value your time so that the $100 or whatever you might save still has you coming out ahead? If you value your time at say $25/hr, and it's going to take you 6-8 hours to save $100, you're losing money on the proposition. Granted this is a very low risk of anyone ever coming to enforce the terms of this contract, but they also don't really have to. MS could just nuke the key on the activation server, which costs them next to nothing, but you're stuck buying another copy of Windows. MS could just do that based on even the mere suspicion that you're up to no good and your only recourse is to take them to court and prove that they are in breach of contract. Even doing it pro se, the filing fees would probably be more than it would cost to go out and get a new copy of Windows. It's the same basic business model patent trolls use. You know it's a racket and that they intentionally set the prices just a little below what it would cost to even file a response to their lawsuit, but most people will pay it anyway because it's cheaper.
 

My Computer

System One

  • OS
    8.1
OK then, seems we're on the same page.
 

My Computer

System One

  • OS
    PC-DOS v1.0
    Computer type
    PC/Desktop
    System Manufacturer/Model
    IBM
    CPU
    Intel 8088, 4.77MHz
    Memory
    16K, 640K max
    Graphics Card(s)
    What's that?
    Sound Card
    Not quite
    Screen Resolution
    80 X 24 text
    Hard Drives
    dual 160KB 5.25-inch disk drives
I'll just build a system, install an OEM copy as I always have. Then buy it from myself for a dollar just as always.

That way I am fully in compliance with the EULA.

At least in the US, I wouldn't expect that argument to hold any water in court if Microsoft ever decided to press the issue. It would probably backfire on you as a matter of fact. The EULA says you have to sell it to an end user and I would imagine any judge would take a rather dim view of you trying to claim you sold something to yourself. Generally speaking, that's fraud. Microsoft's lawyers argue that from the very beginning you intended the computer to be for your own personal use and that you were full cognizant of the prohibitions in the EULA on doing so. So on top of breach of contract they could probably tack on fraud and copyright violation.

The only way I could see you having a prayer is if you do computer building professionally and are incorporated in whatever state you live in (assuming you live in the US). Then used corporate funds for all the hardware and software purchases then selling the system to yourself and paying for it with personal money. However, the taxes you'd pay as a corporate entity would far and away surpass any savings on this OEM version of Windows vs just buying the retail version. Plus you could potentially open yourself up to other legal issues for giving yourself, effectively the CEO of your company, a sweetheart deal using corporate funds. You're not allowed, even though it happens all the time, to use company funds for your own personal gain. You can pay yourself a salary, but that's it. Otherwise, in the hypothetical scenario where Microsoft comes after you, they could tip off the IRS and state tax collection agency that they may want to audit your tax filings, both personal and corporate.

Wall of text ..... Meh!
 

My Computer

System One

  • OS
    Windows 8
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