Microsoft UK points finger at Middle East channel

Microsoft has launched a US$7m civil case in the UK against reseller Itac, alleging that the company had been selling grey software sourced from the Middle East

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By  Stuart Wilson Published  January 26, 2005

Microsoft has launched a US$7m case in the UK against reseller Itac, claiming that the reseller had been selling grey software — also referred to as parallel imports — sourced from the Middle East. In court documents, leaked to channel magazine CRN in the UK, Microsoft has alleged that the parallel import software was discovered when end-user customers realised they were being sold software that had not been made for sale in the UK market. The document claims that Itac had been sourcing the product from an unauthorised distributor in the Middle East, according to CRN. The case raises concerns that some Microsoft product sold through the Middle East channel may be finding its way to end-users outside the region. If the allegations prove to be correct, it also increases the pressure on Microsoft Middle East’s regional management to stamp down on grey product flow and address exactly how the product ended up in the UK. Adnan Al-Falah, managing director at Tech Data Middle East, an authorised Microsoft distributor in the region, and a staunch supporter of moves to clean up the behaviour of vendors in the region, said: “We welcome any initiative Microsoft is taking in the region with respect to auditing distributors. If Microsoft really intends to clean up, that is fantastic news.” Thomas Hansen, Microsoft’s regional small and midmarket solutions and partners (SMS&P) director recently met with distributors in Dubai to discuss channel issues. Hansen has been covering the South Gulf for Microsoft since the abrupt departure of Joe Devassy from his role as SMS&P manager for the region in late 2004. A spokesperson for Microsoft Middle East said that the company would not be commenting further at this time on an ongoing case and referred instead to an earlier statement issued by Alex Hilton, Microsoft compliance officer. “Parallel importing and breach of trademark and copyright are serious issues that we do not take lightly. Our priority is to protect the vast majority of our channel partners, which are operating legally,” stated Hilton.

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