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Microsoft to Cough Up $1.1 Billion to Settle Suits

Jan 13, 2003
By

Clint Boulton






Microsoft late Friday agreed to pay up to $1.1 billion to settle class-action lawsuits brought by California businesses and consumers who claimed the company had overcharged for software.

The Redmond, Wash. software concern, who admitted doing no wrongdoing in the case, said the settlement will be paid out to up to 13 million California businesses and consumers in the form of vouchers to buy computers and software. The vouchers, ranging from $4 to $29, will be offered to California customers who purchased Excel or Word programs between Feb. 18, 1995, and Dec. 15, 2001.

Two-thirds of the amount not claimed will be donated to 4,700 of California schools, according to legal counsel who worked the case. Microsoft would keep the remaining third of any unclaimed portion. The amount of each rebate will be set per software license.


Microsoft agreed to allow customers to search its registration database to determine the cost of what they purchased over the timeframe. The company will also try to contact affected parties.

According to published reports, Eugene Crew, lead attorney for the California plaintiffs, said the settlement was a victory for consumers who claimed they were overcharged for software. Crew said going to trial would have posed great risks to Microsoft because the California case went beyond the violations Microsoft committed in the case brought by the U.S. Department of Justice.

Microsoft had previously proposed a nationwide settlement of the class-action lawsuits that was rejected by a judge in Baltimore a year ago. Microsoft still faces smaller claims that it overcharged consumers in other states, including Massachusetts and West Virginia.

Final approval of the California settlement is still pending and subject to approval by a San Francisco court later this month.

Apart from the California settlement, Microsoft has other legal woes pending, including its battle with rival Sun Microsystems. U.S. District Judge J. Frederick Motz of Baltimore narrowed Sun's antitrust suit Friday against Microsoft and said he would rule next week on Microsoft's attempts to drop additional claims.

In that case, Sun scored a major coup when Motz issued an injunction against Microsoft, ordering the company to include a Java Virtual Machine, or JVM, in its Windows XP operating system.


 

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