Trend Micro: No Compensation for Faulty Update

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The number of companies affected by a faulty antivirus update released by Trend Micro during the weekend stands at 652 businesses, but the company has no plans to compensate users for losses they may have incurred as a result, executives said at a news conference on Tuesday.

A fault in the software update file, released Saturday morning local time, caused a problem that sucked up processing power of PCs that had downloaded the update. The faulty file severely degraded the performance of PCs in companies and homes all over the world, Trend Micro says.

"I am really, really sorry for releasing this product ... [which caused] a lot of trouble for our customers and stopped your businesses working for more than two days," says Eva Chen, chief executive officer at Trend Micro.

The fault was caused by two major errors, says Akihiko Omikawa senior vice president, Japan Sales and Marketing, at the company. The part of the code that caused the loop had not been checked. Secondly, the file had not been checked on PCs using Microsoft's Windows XP Service Pack 2, he says.

The file affected mainly PCs using the Windows XP SP2 operating system with Trend Micro's OfficeScan PC-cillin Internet Security 2005 VirusBuster software, the company says.

Thousands of Calls

By 2 p.m. local time on Tuesday, Trend Micro had received over 370,000 calls from business and home users in Japan requesting information about, or help coping, with the faulty data file, Omikawa says.

Some PC vendors were also affected. The PC helpline at NEC, Japan's biggest supplier of PCs to the Japanese market in 2004, received about an extra 3000 calls over the weekend from customers affected by the buggy update, NEC says.

"The calls started tailing off on Sunday once the issue had been aired on TV," says Diane Foley, a spokesperson for NEC.

Despite the problems, Trend Micro does not plan to pay compensation to individuals and corporate clients, says Mahendra Negi, the company's chief financial officer.

"We have been focusing on supporting our customers ... we are not looking at compensation," he says.

So far, the company has not received any news of legal action by individuals or companies, or of corporate customers withdrawing from contracts with Trend Micro, Negi says.

Since Saturday morning, the issue has cost Trend Micro $2.8 million and this figure is likely to grow, he says.

It is too early for the company to comment on the longer-term financial impact of the faulty file, Negi says.

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