Microsoft Corporation (NASDAQ:MSFT) has been relatively litigation-free - at least compared to its primary rivals, Google Inc (NASDAQ:GOOG) and Apple Inc (NASDAQ:AAPL), which are continually battling a proxy war in courtrooms around the world - and has been able to focus a lot of energy on selling its new Windows 8 operating system and Surface tablet. But apparently, in selling its Surface, one person at least thinks Microsoft is doing it in a misleading way.
Andrew Sokolowski, a California-based lawyer whose practice specializes in "protecting consumers' and employees' rights," was apparently himself a consumer who had purchased a 32-gigabyte Surface tablet computer. However, he claims that the 32GB advertisement is misleading, and has filed suit against Microsoft Corporation (NASDAQ:MSFT) to that effect. He claims to not seek damages, but rather to make sure that Microsoft makes it more clear what customers are buying when they buy a tablet computer.
Sokolowski claims that he believed that he had 32 GB of memory space available when he bought the tablet, but that half of the space was occupied by pre-installed software and apps.
"The consumer is going to be forced to upgrade the Surface tablet by buying a peripheral device that expands the Surface's memory to what the consumer initially thought he or she purchased in the first place," said Sokolowki's lawyer, Rhett Francisco, in a statement. "That's simply unfair to consumers, that's a violation of the law, and Microsoft knows it. ... Mr. Sokolowski's lawsuit against Microsoft is about protecting consumers as we head into the holiday shopping season. Microsoft is misrepresenting the storage capacity and capabilities of its Surface tablet, and consumers should know about it."
In response, a Microsoft Corporation (NASDAQ:MSFT) spokeswoman said, "Customers understand the operating system and pre-installed applications reside on the device's internal storage thereby reducing the total free space. Surface with Windows RT customers benefit from the ability to attach additional storage via the integrated microSD slot or full-size USB port."
Microsoft has information about its storage space, but Francisco claims the information is buried deep within the Microsoft Web site and thus is not readily accessible and available to consumers.
Microsoft claims this suit has no merit. Do you agree? Does this have enough legs to affect investors like billionaire Seth Klarman of Baupost Group?