READING, England, and REDMOND, Wash. — Jan. 4, 2012 — Microsoft Corp. today issued proceedings against Comet Group PLC for allegedly creating and selling more than 94,000 sets of counterfeit Windows Vista and Windows XP recovery CDs. The alleged counterfeits were sold to customers who had purchased Windows-loaded PCs and laptops.

“As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom,” said David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft. “Comet’s actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too.”

The suit charges Comet with producing the counterfeits in a factory in Hampshire and then selling the media to customers from its retail outlets across the U.K.

Comet is currently owned by French retail company Kesa Electricals PLC, although it is reportedly being purchased by private equity firm OpCapita LLP later this year.

With an emphasis on education, engineering and enforcement, Microsoft seeks to protect its customers from counterfeiting and piracy — and ensure people get what they pay for. If customers ever question the legitimacy of their software, be it a shrink-wrapped product or recovery media, they are advised to visit http://www.howtotell.com to learn more and, if they have any doubt, report the suspicious software to Microsoft.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.

http://www.microsoft.com/Presspass/press/2012/jan12/01-04CometPR.mspx?rss_fdn=Press%20Releases

This is a lot more complicated than this article makes it sound.

Comet gave backup disks with computer and Windows purchases. Those discs they made themselves. However the license that Comet bought from Microsoft and sold to consumers is cheaper because it doesn't include backup DVDs, only a backup partition on the drive.

By making the backup DVD themselves and selling it to consumers for 3 bucks, they got a discount on Windows license for which they charged customers a full price.

I see this going only one way.

Trying to cheat a Company as big with Microsoft... not too smart.

At least Microsoft are going for retailers in breach of their agreements rather than a consumer.  I think this will be settled out of court very very quickly.