Judge Nixes Consumer Class-Action Against Microsoft

Apr 15, 2003

Thor Olavsrud

A federal judge handed Microsoft a legal victory Monday when he ruled that more than 60 pending consumer antitrust lawsuits against the company were not eligible for class-action status.

U.S. District Judge J. Frederick Motz, who is also presiding over Sun Microsystems' antitrust suit against Microsoft, found that it would be too difficult to identify a group of plaintiffs considered typical buyers of Microsoft's software, and that the individual suits were too dissimilar to be tied together.

However, he did allow a much smaller group of suits -- consisting of consumers who purchased about $10 million of Windows software through Microsoft's Web site -- to join together in a class-action suit.

Most of the cases were filed in 2000, after Judge Thomas Penfield Jackson found the company to be a monopoly that had violated antitrust laws. While Jackson's remedy was later overturned, and the case settled , Jackson's findings on the antitrust violations stood.

Many of the consumer cases filed in the wake of Judge Jackson's decision claimed that Microsoft used its monopoly power to overcharge consumers for its Windows software and Office productivity suite. The consumers' lawyers had hoped to bring those cases together as a class-action suit which would bring together thousands of computer users. Motz erected the first roadblock on that path in 2001, when he ruled that only consumers who purchased their software directly from Microsoft could sue the company. Several dozen of the cases were thrown out as a result.

Judge Motz whittled the remainder down further on Monday, though his opinion allows consumers to continue pursuing individual suits.

Microsoft had tried to settle about 100 of the cases in November 2001, with a plan that called for Microsoft to provide software and computers to more than 12,500 of the poorest public schools in the U.S. for five years, at an estimated cost of $1.1 billion. Additionally, Microsoft's proposed settlement had offered $900 million worth of software for five years to schools in which most students qualify for federal lunch programs. Reconditioned computers and technical support were also part of the deal.

But Motz nixed the deal by January 2002, noting the cases had not progressed to the point that he could determine what damages might have been obtained through litigation. Microsoft's solution also faced stiff opposition by competitors like Apple Computer, which claimed the settlement would strengthen Microsoft's position in schools, one of Apple's prime markets.


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