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Due to the latest dashboard update, all of Datel's Xbox 360 memory cards have been disabled.

Datel has recently filed an antitrust lawsuit (PDF) against Microsoft, due to the latest Xbox 360 dashboard update. The update added social network functions such as Twitter and Facebook functionality. However, one other "feature" of the update disabled unauthorized storage devices for the Xbox 360; namely third party memory cards and hard drives.

According to the lawsuit, the attorney representing Datel stated, "[Microsoft] accomplished their recent update by making a system change that will not recognize or allow operation of a memory card with greater capacity than their own. We believe that with the power Microsoft enjoys in the market for Xbox accessories this conduct is unlawful." Datel also believes that actions like these create a monopoly dominated by Microsoft, since they will be able to disable any accessories, such as memory cards or controllers.

Currently Microsoft offers a 512MB memory card that retails for $29.99, which previously retailed for $59.99. On the other hand Datel offers a 2GB memory card for $39.99 and a 4GB memory card for $49.99. Both of which have now been disabled by the recent dashboard update.

According to Microsoft, the update curbs cheating and unauthorized storage devices are not tested for safety and compliance standards. Datel argued that their Xbox 360 memory cards are fully compatible and have not damaged any consoles.

Datel is seeking the following in the lawsuit: to desist Microsoft from continuing anti-competitive actions, triple the amount of financial losses that Datel will incur, legal fees, and punitive damages.