May 4, 2007 10:46am
• Customers say the companies secretly signed them up for MSN
• Tapped buyers’ bank accounts
Microsoft Corp. (NASDAQ: MSFT) and Best Buy Co. Inc. (NYSE: BBY) must stand trial on charges they violated the federal anti-racketeering laws, the 9th U.S. Circuit Court of Appeals ruled Friday.
The two companies are accused of secretly signing up buyers of computers and cell phones for Microsoft’s MSN Internet service.
In reversing a U.S. District Court ruling that had tossed the lawsuit, the court of appeals says there is enough substance to the complaints to bring the companies to trial under the Racketeer Influenced and Corrupt Organizations Act, often called the “RICO” act.
The case started after James Odom bought a PC-based laptop at a Contra Costa County Best Buy store. Data about the purchase was sent to Microsoft as part of a joint marketing agreement between the companies. Microsoft then signed Mr. Odom up for its MSN Internet service and, after a free trial period, began billing him for it.
That was all done without his knowledge or agreement, he says.
A similar incident happened to the buyer of a cell phone at a Reno Best Buy store, the case says. Microsoft withdrew monthly MSN payments from her debit card account for 17 months without her knowledge or permission, the allegations say.
Best Buy said Monday it would have no comment at this time. Microsoft has not responded to a request for comment.