Penalties for Licensing Violations

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Respected Contributor

Does anyone know what happens when MS determines that Licensing requirements have been violated? do they ask for back payment? restrict support? block usage?

4 Replies
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I think they are going to ask for back payment, but to be honest, I don't know what's going to happen...Microsoft could also open a legal compliant to any customer violating Microsoft products licensing
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I imagine there would be audit exercise or sort of clemency, where an organisation declared any unlicensed software and paid for all instances.  Not recent but this thread has reports from people that have been through this, I have picked out a few quotes -

 

  • "In our case we had to buy all out of compliance licenses and the fine was 2x the cost of those licenses"
  • "If you are knowingly non-compliant and not working to rectify the situation you can be held liable"
  • "in a worst case scenario, you could be in a situation where in court your software vendors could argue that since you worked with stolen software (and intentionally) that everything ever produced using that software belongs to them"

Fear of MS licensing audit...

 

Also from "Microsoft Software Licensing Audit: What are they looking for?"

 

"For Microsoft® VL customers, it’s not a question of if they’ll be audited, but rather, when it will occur. The terms of the VL Agreements grant MS the right to perform an audit once each year with thirty days’ notice. MS has implemented a policy whereby Select, Open, and EA customers should expect an audit at least once every three years. This may take the form of a self-assessment or an onsite audit. If the audit reveals unlicensed usage of 5% or more than they have licensed, the customer will be required to pay the retail price for all unlicensed products plus the cost of the audit."

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Interesting question. Fortunately never been in such situation, but who knows - quite few people read carefully all these license agreements...

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Interestingly I have a school that is happy to use the Microsoft products but refuse to pay for it. They are out of compliance by doing so but I do wonder how harsh MSFT will be in this case. I've certainly not seen a school previously actively and effectively pirating their entire estate. Being a MSFT partner this doesn't sit well with me and it's new territory.