Howard Rice Represents Datel in Antitrust Lawsuit Against Microsoft Corporation

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San Francisco, CA— November 23, 2009 — UK-based Datel Design & Development, Ltd., the market leader in developing innovative videogame enhancement products, announced today that it had filed an antitrust lawsuit in San Francisco federal court against Microsoft concerning Microsoft’s recent downgrade of the Xbox 360 to render it incompatible with Datel Max Memory cards.

“For many years, Datel has brought to the public products that offer more capacity, extra functionality or other game enhancing features with the aim of offering a reasonably priced alternative to first-party accessories,” said Datel founder Mike Connors. “The Max Memory card plugs into the Xbox 360 and allows a user to store games, characters, and similar information. It permits a player to transport game information between Xbox systems. The Microsoft memory card does exactly the same thing—with the difference that it offers only one-quarter the memory while listing for the same retail price. Datel engineered the Max Memory card to be 100% compatible and over 50,000 Max Memory cards have been sold without a single report of harm to the Xbox console.”

The Max Memory card, in 2 gigabyte and 4 gigabyte sizes, responded to customer demand for a reasonably priced, large memory card that was 100% compatible with the Xbox 360. Since its introduction in May 2009, Max Memory has enjoyed enormous success. Max Memory has a suggested retail price of $39.99 for the 2 gigabyte size. In contrast, Microsoft’s largest memory card is a 512 megabyte card which was priced at $59.99 prior to the introduction of Max Memory (and in response to Max Memory was reduced to $39.99)

Howard Rice Director Marty Glick, the senior attorney representing Datel in the lawsuit, said, “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. 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.”

Datel recognizes Microsoft’s right to innovate. But the recent “upgrade” to the Xbox 360 is not innovation. It is predatory conduct undertaken to deliberately harm competition with no benefit whatsoever to consumers. Antitrust law protects the right of consumers to choose. Just as a car manufacturer can’t require a buyer to purchase tires for the life of the car from the manufacturer, Microsoft cannot force consumers to buy accessories only from it. Free competition in the marketplace allows consumers the most choices at the best prices. Datel believes that its antitrust lawsuit will restore competition and permit consumers to enjoy the benefits of their Max Memory cards, as well as the many other innovative products Datel has in the pipeline.

To review Datel’s complaint, please click here.

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