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Software auctioneers face closer scrutiny

For Microsoft, shutting down auctions of illicit software is like shooting fish in a barrel.

Microsoft has taken an aggressive stance against illegal auctions of manufacturers' versions of its software on sites like eBay, but others who sell such software on the Web find it easier to escape the company's attention.

Net-Sol, an Oakwood, Georgia-based reseller, is offering an OEM (original equipment manufacturer) version of Microsoft Office 97--originally bundled with a PC--for $60. Rich Kellogg of Net-Sol said the company got Microsoft's blessing before putting the product up for sale.

Kellogg called Microsoft's anti-piracy hotline. "We spent hours on the phone with Microsoft," said Kellogg. "They said [the copies of Office 97] were fully legitimate and could be sold as licensed units."

But if Kellogg were to put those same products up for auction on eBay, his auction would likely be shut down. That's because Microsoft patrols auction sites for illegal or pirated versions of its software, and OEM versions can legally be sold only with the hardware they were originally bundled with.

Despite what Microsoft told Kellog, "bundled products are not for resale, apart from the computer," said Nancy Anderson, a Microsoft attorney. "The user agreement is clear that it is to be distributed on the computer in which it was installed."

But Microsoft monitors auction sites like eBay because sellers of illicit software are aggregated in one area, making it easier to pick them off.

Since late 1997, eBay has cooperated with software vendors, including Microsoft, to shut down illegal auctions. The software category on eBay is littered with closed auctions, some of which offered products that were clearly labeled as OEM versions.

But many eBay users have complained that the site's Legal Buddy program (in which eBay teams up with vendors to shut down illicit auctions) is unfair because auctioneers are not contacted first. They now may have another complaint: because of the Legal Buddy program, eBay auctioneers are under more scrutiny than others who sell OEM software online.

According to Anderson, Microsoft is equally concerned about all illegal sales of its software, and is not singling out auction sites for special attention. "I don't think there's any particular favoritism in terms of how we're applying our resources," she said.