Datel suing Microsoft over memory-unit lockout

British maker of high-capacity, low-price storage units takes legal action against software giant, accusing it of antitrust violation.


In October, Microsoft revealed that the fall Xbox Live Update would lock out what director of programming Larry "Major Nelson" Hryb termed "unauthorized Memory Units." Though not mentioned by name, the company most affected by the move was Datel, which sells Xbox 360 Memory Units with both higher capacities and lower prices than those made by Microsoft.

Datel's 2GB and 4GB memory cards were locked out by Xbox Live's latest update.
Datel's 2GB and 4GB memory cards were locked out by Xbox Live's latest update.

Now, just days after the Xbox Live Update went live, Datel has fired back at Microsoft--in court. This morning, the law firm of Howard, Rice, Nemerovski, Canady, Falk, & Rabkin announced it had filed a lawsuit in a San Francisco federal court on behalf of the UK-based peripheral maker.

Submitted late Friday, the suit accuses Microsoft of violating antitrust laws by requiring 360 owners to buy only Microsoft-made accessories. It asserts that doing so is an illegal practice, tantamount to a car manufacturer forcing auto owners to buy only a certain brand of tires in perpetuity.

"Microsoft has taken steps to render inoperable the competing Datel memory card for no visible purpose other than to have that market entirely to themselves," said Howard Rice director Marty Glick in a statement. "They accomplished their recent update by making a system change that will not recognize or allow operation of a memory card with greater capacity than their own. We believe that with the power Microsoft enjoys in the market for Xbox accessories this conduct is unlawful."

As of press time, Microsoft had not responded to requests for comment about Datel's suit. The action asks that Microsoft be found to have violated federal antitrust laws and ordered to remove the part of the Xbox Live update that blocks current and future Datel devices. It also asks that Microsoft pay three times the cost of any damages Datel suffers from the lockout, as well as compensate the company for all attorney and court fees.

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