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Microsoft Businesses Windows

Italian Consumer Watchdog Sues Microsoft Over 'Windows Tax' 313

Posted by Soulskill
from the get-out-of-arrears dept.
An anonymous reader writes with this quote from El Reg: "[An] Italian consumer watchdog is suing Microsoft over the 'Windows Tax' – the near impossibility of an ordinary user getting a refund if they decide to delete Microsoft's software from a new computer or laptop. The class action case says Microsoft makes it too difficult for people who buy a computer with Microsoft software on it to remove that software and get their money back. Most users do not realise that starting the software means you have accepted the end user licence."
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Italian Consumer Watchdog Sues Microsoft Over 'Windows Tax'

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  • Updated TOS (Score:5, Informative)

    by SilverHatHacker (1381259) on Monday January 24, 2011 @06:59PM (#34987948)
    I recently bought a Sony VAIO laptop. I was somewhat surprised to see that Windows 7's license agreement now says "contact the manufacturer and find out their refund policy" rather than "contact the manufacturer for a refund". Not only that, underneath it was a separate agreement from Sony which said, in a nutshell, that it was all or nothing. Looks like somebody got tired of actually having to keep their promises to us nerds.
    • Re: (Score:2, Insightful)

      by Frosty Piss (770223) *
      If you don't want to pay for Windows, don't buy a machine with Windows. I haven't paid for Windows in over 10 years. I buy a new machine just about every years. But not ones that come with Windows.

      Why no noise about being able to buy a Mac without whatever Macs run?
      • Re:Updated TOS (Score:5, Insightful)

        by Locke2005 (849178) on Monday January 24, 2011 @07:15PM (#34988122)
        Right... just try buying a new laptop without Windows preinstalled... it seriously limits your choices! In fact, it's usually cheaper to buy a laptop on sale and throw away the Windows license than it is to buy one without Windows preinstalled!
        • it's usually cheaper to buy a laptop on sale and throw away the Windows license than it is to buy one without Windows preinstalled!

          So if Windows makes computers cheaper, what exactly is the Microsoft tax?

          • Re:Updated TOS (Score:5, Insightful)

            by sjames (1099) on Monday January 24, 2011 @07:25PM (#34988226) Homepage

            It doesn't make laptops cheaper, it just makes inexpensive laptops a bit less inexpensive. The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs. That, in turn, is why people are getting fed up with the Windows tax.

            • by houghi (78078)

              It is not all Windows fault. Some companies pay the manufacturer money to install their shareware (like anti-virus scanners)

            • Re:Updated TOS (Score:4, Interesting)

              by dhavleak (912889) on Monday January 24, 2011 @08:32PM (#34988934)

              The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs.

              There are some unstated assumptions in that statement. I don't know what the real numbers are, but here are some thoughts:

              Suppose OEMs did offer a simple checkbox for wheter you want Windows pre-installed:
              1. Some % of people buying laptops want Windows on it -- let's say x%
              2. Some % of people buying laptops don't want Windows on it -- let's say y%
              3. Some % of people buying laptops have no clue and will go with whatever is cheapest (i.e. will exclude windows w/o realizing what they're doing, if it was offered as an option by the OEM) -- z%

              For x%, the economics remain mostly unchanged. For y% the economics improve due to no Windows OEM price. For z% the purchase just got quite painful because they saved the OEM price, but now they need an OS, and they are no longer eligible for OEM pricing. Worse -- they get angry at the OEM that sold them a useless machine, and vow never to do business with them, and they spend a lot of time (i.e. spend a lot of OEM's money) on the phone with support trying to figure out what the hell is going on.

              The final economics for the OEM depends on the exact percentages of x%, y% and z%, and the final number for how much z% costs them in support calls, alienated customers (future sales), etc. Of course, you also need to factor in the same thing for the y% folks.

              There's also a built-in assumption here, that the z% will want Windows -- but it's not a stretch -- not everyone has a nerd at hand to install Linux and configure it to make it work for them.

              I don't know the answers to these questions -- but I do question the veracity of the statement that MS's licensing arrangements make purchasing an OS-less laptop more expensive. I think if this wasn't slashdot, an assertion like that would need more substantiation. I suspect that OEMs would offer whichever options give them the best combination of customer satisfaction, and profit margins. The checkbox to purchase w/o Windows being absent certainly does mean that it costs more for them to give us that option -- on this we agree. But the actual cause of that cost is what I am questioning here.

              • by sjames (1099)

                The answer is to ACTUALLY provide the refunded license cost if you wipe the drive rather than accepting the EULA. X remains happy. Y gets their money back, and Z never knew it was an option but it looks like the one at work, so it must be OK.

                I have no doubt the OEMs are selecting the most profitable option, but that's only because MS is doint things like telling them to install Windows on 100% of their machines or the price per machine doubles. That may not be the exact deal happening now, but MS making dea

              • There's also a built-in assumption here, that the z% will want Windows -- but it's not a stretch -- not everyone has a nerd at hand to install Linux and configure it to make it work for them.

                A few years ago my brother, who is not a computer nerd but reasonably self motivated as a user, downloaded a linux distro and asked me to help install it.

                I visited him for the weekend (he lives in a different city) and sat in his living room watching TV with my nephews while he tried to see how far he could get. I told him to give me a yell if he got stuck.

                When he finally called me over to the computer (one TV episode later, so probably about half an hour) he was finished.

                Not every non-nerd needs a nerd to

            • The fact that buying a bare laptop is more expensive is a nasty side-effect of MS's licensing arrangements with OEMs. That, in turn, is why people are getting fed up with the Windows tax.

              Bare bones doesn't sell worth shit.

              While Walmart.com finds it profitable to stock 240 Win 7 laptops and 89 desktops. None of them high end product.

              The OEM Windows PC benefits from enormous economies of scale.

              In manufacturing. In marketing.

              The OEM Windows PC benefits from the fact that it is sold as a ready-to-run home appl

              • by sjames (1099) on Monday January 24, 2011 @09:32PM (#34989442) Homepage

                Absolutely none of that explains why they can't refund you the cost of the license if you wipe the drive.

          • by Locke2005 (849178)
            If they can afford to sell me the laptop for $300 AND pay Microsoft $45, it stands to reason that they could afford to sell me the laptop for $255 without Windows. It's as simple as that.
            • Re:Updated TOS (Score:5, Insightful)

              by click2005 (921437) * on Monday January 24, 2011 @07:36PM (#34988348)

              Dont forget they earn a few dollars installing Norton, a few more for the MS Office trial version, browser toolbars and other crap-ware.

              • by Locke2005 (849178)
                True; the first thing I have to do with every new prebuilt computer is uninstall the Norton 30-day trial and install Microsoft Security Essentials. But does the bribes the company gets for preinstalling trial software really exceed the money they pay for the Windows 7 license?
                • I think it very well might be. Isn't that basically Microsoft's business model? They found a way to compete on price with free (as in beer).

            • You already pay $300 for a laptop, why the hell would they lower the price when they could gain $45 more in profit?
              • Why? Competition. That's how a market system works.

                • Why? Competition. That's how a market system works.

                  Actually, the market currently works by shipping you a system with Windows. To say anything else is just an idealised concept of market forces. This story is all about subverting the way the market works.

                  Now in this case, you might think that you would save $45 without getting an operating system, but that $300 laptop is sold with a support cost built in. The manufacturer has to provide a system for support at a mostly fixed infrastructure cost. This cost is determined by assuming that only a certain percen

      • First, because IMHO there is nothing that runs better on Macintosh than OS X. If Windows were as good as OS X, there would be less of a problem with this. Secondly, the hardware and OS comes from a single company (Apple) so I believe there's more leniency with the bundle. Thirdly, there's no retail/OEM pricing available for OS X because it isn't sold as a separate product.
        • by PopeRatzo (965947) *

          because IMHO there is nothing that runs better on Macintosh than OS X.,

          Which is why Boot Camp does not exist.

          • by mug funky (910186)

            well... it's possible considering how fast OSX runs on a commodity PC.

          • 1- You don't get the same battery life (not even close)
            2- No multi-touch on the trackpad

            I know that's driver related, but still...

        • by PopeRatzo (965947) *

          Secondly, the hardware and OS comes from a single company (Apple) so I believe there's more leniency with the bundle.

          So much "leniency" that it is impossible to buy a Macintosh without OSX.

          there's no retail/OEM pricing available for OS X because it isn't sold as a separate product.

          Or maybe it's not sold as a separate product because there is no retail/OEM pricing available.

      • If you are ordering a computer from a brand name: Dell, Toshiba, Lenovo, HP, Sony, etc. it's near impossible to order one without Windows unless you happen to be a business. If you are building your own desktop from parts from a site like Newegg then you can. If you want a laptop, you are out of luck. Sure you could order parts of a laptop from Sony and then assemble it, but by the time you've ordered all the parts, you've paid more than the price of the assembled laptop.
        • by CastrTroy (595695)
          You could go get a laptop from System76 [system76.com]. Just priced one out. It would cost me about $900 US for a computer with similar specs to what I recently paid $400 CDN for in an HP Windows 7 Laptop. The only difference is that my screen is not quite as high resolution. But the machine I bought has a much cleaner style and doesn't look like it was designed by a geek. The basic problem is that computers with Linux do not get the advantage of economies of scale. So it ends up costing you more if you want a comput
      • by h00manist (800926)

        If you don't want to pay for Windows, don't buy a machine with Windows.

        Linux-preinstalled machines are still available, but there were a majority of the budget machines for a while. It was sad when people just wanted to format it and install that OS everyone else uses. They didn't even know what an OS was, but they wanted the one everyone else has.

      • Why no noise about being able to buy a Mac without whatever Macs run?

        Because Apple has not gone about forcing exclusive deals onto every significant hardware manufacturer in the market. This case is about exclusive and exclusionary deals between Microsoft and PC sellers and its effect on the end consumer.

    • by Simon80 (874052)
      Yeah, it's been like that since Vista, and I also find it annoying and objectionable. I was told by a fellow student last fall that they had some success buying laptops without Windows by calling the OEM's sales line and demanding it as a condition of sale. I haven't had a chance to try this yet, and I don't know whether this works for machines in e.g. the bi-weekly specials that Dell likes to rotate, but I'm definitely going to try it on the next laptop I get, and so should any non-Windows-user who is buyi
    • by Locke2005 (849178)
      Shame on YOU for still buying the overpriced crap that Sony now markets... and yes, I can still remember when Sony made good equipment.
  • by Anonymous Coward on Monday January 24, 2011 @07:01PM (#34987964)

    now look at the mac os tax
    it has to be at the most $1500-$500 on the mac pro.

    • I agree with you there... I have 5 machines running OSX at the moment. TWO of them are older Apple machines runing 10.4 Tiger. The other THREE are off the shelf PCS running 10.6.6 Snow Leopard Total for 2 desktop machines and a netbook? A little over 2500 dollars.
    • by icebike (68054)

      Not germane.

      Apple builds the computer and the OS.

      Microsoft does not build computers.

    • now look at the mac os tax
      it has to be at the most $1500-$500 on the mac pro.

      thats a tax on the trendy. its widespread among most apple products.

  • Way to go ADUC.
    They might not get very far, but I will cheer them on.

  • Why buy a computer with Windows when you want a computer without Windows? I buy lots of things and throw out part of it. I don't expect a refund on the skin of an onion that gets peeled and promptly thrown away.

    • by grantek (979387) on Monday January 24, 2011 @07:16PM (#34988132)

      I don't expect a refund on the skin of an onion that gets peeled and promptly thrown away.

      Yes, but the farmer doesn't pay a third party to add skins to their onions, thus increasing the cost of onion production. They may pay Monsanto, but without going too far off topic, that system's just as screwed up.

      • Yes, but the farmer doesn't pay a third party to add skins to their onions, thus increasing the cost of onion production.

        Or does the onion skin provide secondary effects which make onion farming cheaper in the long run?

        That is to say, does shipping the most widely used OS on the planet, which supports most hardware and software out of the box, reduce support costs over time? Even though Linux is free, it might cost more to support each Linux box than a Windows box. It's plausible, and would therefore make the Windows products actually cheaper. I remember seeing Dell computers preinstalled with Ubuntu were often times even mor

        • by grantek (979387)

          I remember seeing Dell computers preinstalled with Ubuntu were often times even more expensive than their Windows counterparts.

          Then they didn't charge enough for Ubuntu software support. Hardware manufacturers should shut up and just support their hardware, rather than say ridiculous things like Apple's "jailbreaking your iPhone voids the hardware warranty, including the screen". I know they're scared that custom, non-sandboxed code might be able to send a "Halt and Catch Fire" type signal to the hardware that otherwise wouldn't happen, but you need a little intelligence and knowledge of your product to be able to respect your cust

          • by CastrTroy (595695)
            I think the only way to resolve this is for the manufacturers to ship some kind of general hardware testing software that works regardless of which OS you are using. That way they could do some better analysis on what's wrong with your computer, even if you installed Linux on it. They they could offer software support for the preinstalled operating system, and if you installed something else, it's up to you to support. Only thing they have to ensure is that the hardware is working.
        • Lol @ 'support'.

          As if ANY of these computers come with 'support' that you don't have to PAY for.

          Sure, sometimes they give you a year of support, bundled in to an overpriced sell, which to any intelligent person is you paying for it.

          But the reality is you will pay for the support, whether it be with dell, or buying microsoft, or paying canonical to spoonfeed you ubuntu fixes.

    • Not many prebuilt computers have the price, specs, and OS we want.

      Some computers, like laptops, can't usually be assembled at home.

      • by jd (1658)

        As far as Laptops are concerned, non-Windows basically means the XO. Which, since the latest version uses ARM, also means non-Intel, which precludes all binary-only software for Linux even if you wanted Linux and not some other OS.

    • by flaming error (1041742) on Monday January 24, 2011 @07:28PM (#34988256) Journal

      > Why buy a computer with Windows when you want a computer without Windows?
      Why buy an onion with skin when you don't want the skin?

      > I don't expect a refund on the skin of an onion that gets peeled and promptly thrown away.
      The onion skin doesn't cost $129.95 when purchased separately. Nor does the grocery store deliberately add the skin and pay Microsoft for the privilege.

  • by microbee (682094) on Monday January 24, 2011 @07:18PM (#34988144)

    Microsoft makes deals with PC manufacturers, who then bundle Windows and sell to end customers. If you buy such a PC, and don't want Windows, you should talk to your manufacturer instead. Why is it an issue for Microsoft to deal with, or make it convenient for you to get a refund from your PC manufacturer? It just doesn't make sense.

    So sue the manufacturer instead.

    • by grantek (979387) on Monday January 24, 2011 @07:25PM (#34988228)

      The problem is Microsoft uses bully tactics and abuse their monopoly to bend the manufacturers to their will. MOST people who buy laptops want or don't mind using Windows on them, so to be competitive in the laptop market you have to have a good price on your laptop+windows bundle, and if you want a good deal on Windows, Microsoft's exclusivity agreements then stop you from offering any other alternative.

      The legal challengers are trying to say that a laptop as a piece of hardware is separate enough from Windows that you shouldn't be allowed to force it on people.

    • by sjames (1099) on Monday January 24, 2011 @07:39PM (#34988388) Homepage

      MS freely offered to provide a refund if you choose not to agree to the terms of the EULA. They then reneg on that offer if you actually take them up on it, even if you bought the laptop with the understanding that the option existed.

      They try to pass the responsibility off to a 3rd party that had no part in the EULA.

      Since then, there have been cases where the OS and hardware are claimed to be offered as an all or nothing bundle, but that may not be legal everywhere and, of course, there is a question of actually getting your free refund should you not agree with the T&C you can only see by turning the laptop on.

    • by redelm (54142) on Monday January 24, 2011 @07:42PM (#34988426) Homepage
      This comment would be correct except for one very inconvenient fact -- Microsoft has been adjudged a monopolist in the EU (and US but penalties were reduced).

      Contrary to popular impression, monopolies are not illegal. But they are restricted by law from doing things (mostly that would preserve or extend the monopoly) that are perfectly legal for other companies.

      Tying or "bundling" is one of those illegal things that monopolies must not do. Selling their product as part of another sale. Software, including should be a sales choice ("Do you want Windows with that?") and invoice line-item.

      How the boxen are configured and shipped is a separate matter. It would probably not be illegal to ship a machine with MS Windows pre-installed (and even stickered) even though the OS was refused at sales time and no price was paid for it. Quiet about virus! This would not authorize use, although a gift recipient might have an innocent user defense.

      • And Microsoft is not the one tying the OS to the PC. So again, not Microsoft's problem.
        • by redelm (54142)
          Depends on the nature of the licencing agreement between the PC mfr and MS. Some of the older ones (still in force?) had mfrs paying MS assuming all machines had MS-OSes. Definitely tying _by_ MS in crafting that agreement.

          Given that history, both MS & the mfr would have to prove there was no bundling. Quite easily done if theirs always a sales-question asked and invoice line-item. Much more difficult if not. Yes, this is guilty until proven innocent, but that is precisely how the US Sherman and C

  • by redelm (54142) on Monday January 24, 2011 @07:18PM (#34988146) Homepage

    I do not know Italian law, but I would not expect an outcome similar to Anglo-American law. AFAIK, they mostly use a "code" approach to the law, the codes dating back to the Romans and being used as generally guiding principles for the judges who have more discretion than common-law courts.

    The fundamental problem for MS and the bundling mfrs is that a refund is not the same as a non-sale. It might be a remedy, but the money has been paid, and the negotiating power is reversed.

    If, for instance, I boot my new machine from a USB key or CDROM, I might never see any notices of refund. Such a clean boot would be a very reasonable precaution to avoid running MS software and avoid a possible allegation of "use".

    • by orzetto (545509)

      AFAIK, they mostly use a "code" approach to the law, the codes dating back to the Romans and being used as generally guiding principles for the judges who have more discretion than common-law courts.

      IANAIL, but we definitely do not have any code dating back to the Romans. There is no continuity between the Roman Empire and the Republic of Italy, which started out as the Duchy of Savoy, then Kingdom of Sardinia, then Kingdom of Italy. We have a sort of Napoleonic code [wikipedia.org] (good thing that our expats bring back s

  • by hAckz0r (989977) on Monday January 24, 2011 @07:25PM (#34988220)

    ...you have accepted the end user licence

    Funny, I thought that is what liveCD's and OS installation software was for?

    Actually, I got so $%&&%$## off a year ago when I bought my last (as in never again) Dell and I was forced to purchase a 64 bit copy of Windoze just to get the amount of memory I wanted. Even though they knew I was going to wipe whatever they put on the disk drive as soon as it arrived I still had to pay the ransom/extortion fee. I never looked back. My next machine was an HP with twice the memory and a blank disk drive. Speak with your wallet, as that is the only language they truly understand.

    • Windoze

      Off-topic, but why is it that the words "Windows" and "Microsoft" are still deliberately mangled when people who particularly dislike the product/company talk about them? It's 2011 already - it's not funny or cute anymore. Do these people distort the names of other companies and products they don't like? What makes Windows/Microsoft special?

      The sign of a mature discussion is when you can refer to things you don't like without having to resort to childish mechanics like deliberate mangling of words. I

    • My last 3 laptops have been high-end HP workstation models with blank disks. They are, compared to the rest, very good about giving you exactly what you want in your computer. I haven't used it or anything, but I believe there is an option to get some of the more mainstream linux distros pre-installed as well. You may have to buy through another reseller like Newegg or CDW for that.

      In the context of this discussion, though, there isn't much point...since I do just fine using Windows myself.

    • I was forced to purchase a 64 bit copy of Windoze just to get the amount of memory I wanted. Even though they knew I was going to wipe whatever they put on the disk drive as soon as it arrived I still had to pay the ransom/extortion fee.

      How do any of these words apply? It's just that they offered you a crappy deal: we will only sell you this memory upgrade as a package deal with a copy of Windows. Companies offer crappy deals all the time, but they aren't forcing you to do anything, demanding a ransom for

  • Should offer a "Linux Option". and a known Linux Option. Not a "bizzare Linux no one has ever heard of that has no drivers" option, and not a "FreeDOS option". But a "Fedora Option" or a "Mandriva Option" or a "Ubuntu Option" or a "SuSE Option" - That should cover 90% of Linux users.

  • by inanet (1033718) on Monday January 24, 2011 @08:17PM (#34988812)

    Last time I bought a computer it was via Dell,

    I rang them up and argued about the fact I didnt want windows.

    they argued it was built into the price.

    at the time windows home premium was around $250 odd, so I said I wanted $200 off the price, whether or not windows was installed.

    it was easier for them to discount me the price of windows (and I doubt it costs them that much per computer) than it was for them to sell me a laptop without windows.

    so forget about trying to get it without windows, the main thing is to not have to pay for it!

  • by nut (19435) on Monday January 24, 2011 @08:24PM (#34988868) Homepage

    I recently bought a Dell Zino HD from Dell NZ. I did it over the phone, so I could ask for the Windows licence to be refunded - there is now way to do it on the website of course.

    The first operator didn't really know how to handle my request and asked if they could call back. When I did get called back I was offered a discount to the value of the Windows licence. So presumably Dell ended up paying Microsoft for a licence on my purchase anyway.

    I'm guessing that Microsoft have insured themselves in the agreements with the system builders and distributors in this way. I don't know how you would go about finding out what the content of those agreements really is though.

  • I don't see this as bad practice... If you don't want a computer with Windows on it, then don't buy it - there are plenty of places you can go and get a computer WITHOUT Microsoft software. Most of them are probably local shops.

  • by bcrowell (177657) on Monday January 24, 2011 @08:53PM (#34989086) Homepage

    Here are a couple of places from whom I've bought linux boxes: http://system76.com/ [system76.com] , http://www.zareason.com/ [zareason.com] Based on my extremely small sample size, I've found system76 to be a little better in terms of quality, but I've seen lots of positive comments about both of these businesses on the web.

    Of course I realize that the existence of alternatives doesn't mean that Microsoft isn't massively exploiting its monopoly power over the market ("monopoly" in the legal sense, which does not require 100% market share). But if nobody bothers to buy from the alternatives, then I can sure as heck guarantee you that the situation will get worse, not better.

    Some big retailers such as Fry's, Target, and Walmart have tried selling linux machines. As far as I've been able to tell, none of them have been successful, and I don't think the failure has anything to do with strong-arm tactics by MS. A while back, Fry's used to sell linux machines for $180-250 that were actually pretty decent. I bought several of them (one for my father, one for my daughter, etc.), and they lasted a long time and gave yeoman service. But they stopped selling them, and when I asked one of the salespeople at Fry's he said that they'd had so many returns that it wasn't profitable. Realistically, what was happening was that a lot of people were buying them, wiping linux off the hard disk, and installing a bootlegged copy of windows. Then when the windows install didn't work correctly, they would return the machine. This wasn't subtle at all. The machines came with a custom linux distro (ThizLinux) that nobody in the U.S. had ever heard of and that didn't even have a web page in English. The docs that came with the machines consisted of five pages of instructions on how to install windows, and no info whatsoever on how to use the linux that came preinstalled.
    Walmart was selling the gPC for a while. I bought one, and although the hardware was decent, the quality of the software integration stank to high heaven.

    What the smaller sellers like system76 and zareason are doing right is to stop trying to invent their own crappy linux distro and just ship their machines with ubuntu, which works. Another thing they're doing right is to market their computers to people who actually want to run linux, as opposed to people who don't know about, don't care about, or don't want linux.

  • Yes I know that not everyone is so inclined or has the time, but if you can (and it's really not that hard), it's a no-brainer to build your own. You get better components, only exactly what you need, and save money.

    I know some will say "what about the other people"... well, most who can't or won't build their own machines just don't care. This Italian dude is a rare exception. Perish the thought, but most users *want* Windows. And I'm in the don't care camp, too, because when I hear "oh I hate Dell", or w

  • Even if you don't use Windows, you benefit from the economy of scale created by millions of Windows-using PC users around the globe who create the demand for PC's.

    Also, because Windows is big, bloated and slow, this has created massive consumer demand for more powerful hardware.

    The upshot is that you wouldn't have a PC which is as cheap, as fast and with as large a memory as what you have today if it were not for Windows.

    Even the fact that Windows is preinstalled on PC's is a piece of streamlining which saves the industry as a whole money (remember, most users end up with Windows: this is just the principle of optimizing the frequent case!)

    • by Whuffo (1043790)
      That's an apologist argument. It assumes that none of the development of computers would have happened without Windows and that's an invalid conclusion. Saying that Linux distributions are too hard to use overlooks the significant changes in the user interface that MS makes at each of their nearly-forced upgrades. It's just as big a change from XP to Ubuntu as it is from XP to Vista and requires just as much training or attitude adjustment. I'm not using Linux right now; I'm using Vista (yuck) because thi

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