P10m damages over software defects: Prince W'house sues Microsoft

CEBU – After two years of complaining over the defective software it bought, Cebu retail giant Prince Warehouse Club Inc. sued software provider Microsoft Corporation and the latter’s business partners in the country for P10.3 million in damages.

In his 25-page complaint filed before the Cebu City Prosecutor’s Office last August 13, Prince Warehouse chief executive officer Robert Go cited that they agreed to purchase Microsoft Business Solution program software known as Retail Management System Version 1.3.1002.

Go stated that with the use of such software, the defendants promised that his business operation efficiency would be maximized and that there would be accuracy in the record-keeping.

He said the defendants promised that their profits would be heightened, and the efficiency of their work and labor would be increased.

“But two months after using the software, it was only known that the software is defective. I complained pero sigi lang ug unya unya. Di unta ko ganahan mokiha kay samok na pero two years of waiting is more than enough already,” said Go in an interview with The FREEMAN yesterday.

He said he purchased the software in October 2006.

Aside from Microsoft Corporation, named respondents in the complaint are Microsoft Operations, PTE Ltd., Microsoft Philippines Inc. Global Implementation Services Inc., Eastwind Retail Management Solutions Inc., Eastwind Enterprise Systems Philippines, Inc., ABC Corporation and ZYZ Corporation.

Prince Warehouse Club Inc. engages in wholesaling and retailing of merchandises, goods, commodities and other products.

George Parilla of Microsoft Southern Philippines Operations, the satellite office of Microsoft Philippines serving the Southern Philippine market, said they are still to release an official statement on the complaint since they have not received a copy of it.

Go, through his legal counsels Deolito Alvarez, Arlan Richard Alvarez and Ian Peter Leyson, said the defendants should have known of the defects of the Microsoft products yet these were withheld from their client.

Go explained that there seems to be a conspiracy among the defendants, as the defective Microsoft products sold to them could have been corrected by taking proper steps.

“Prior to and at the time of the sale and purchase of Microsoft software, defendants did not disclose to plaintiff the problems and operational glitches of their software, and did not clearly admonish plaintiff of the dangers that could arise with the utilization of their software,” Go said in his complaint.

Go said the software, contrary to the promises of the defendants, were not fit for their intended purposes and instead caused serious errors which resulted in tremendous losses in his business.

Among the glitches that Go cited are the erroneous reading by the software of the bar codes and the random price altering of merchandise.

For example, Go said that the P13.25 price of C2 health drink bottle is erroneously entered at P4.0001 while bar codes of some items are erroneously read with zero prices.

The wrong prices arising from the erroneous reading of the bar codes caused by the defect in the software resulted to huge amount of business losses, Go’s complaint claimed.

The defective Microsoft software, Go said, are being used in their Prince Warehouse Club branch along M.C. Briones Street corner Burgos Street in Cebu City.

Go is seeking for P2,088,353.25 in actual damages representing the total purchase prices and related expenses of the program, P1,511,334.14 in actual damages from pricing error, P5,818,730.18 in damages for loss of income and business opportunity, P200,000 in compensatory damages, P200,000 in exemplary damages, P200,000 in attorney’s fees and another P300,000 in litigation expenses. — with Ehda A. Dagooc/LPM (THE FREEMAN)