Microsoft settles Iowa class action suit

The plaintiffs had alleged that Microsoft violated Iowa antitrust laws by monopolizing the market, which denied free choice and innovation, forced Iowans to overpay for software and opened consumers up to security breaches, according to the class action complaint (PDF).

The specific award amount and claim process will be disclosed once the court has approved the settlement at a hearing planned for April 20, according to the joint statement.

"We are confident that the settlement is in the best interests of all members of the class and we are deeply grateful for the quality and fairness of the judicial process in Iowa," Roxanne Conlin, lead counsel for the class, said in a statement.

The Iowa antitrust case gained notoriety for the now famous "If I didn't work here, I'd buy a Mac" e-mail sent by Microsoft executive Jim Allchin, who is now retired. The Microsoft in-house e-mail from 2004 received some notice after it was released as part of Microsoft's document production for the case.

Iowa's case is also notable as one of the last state antitrust cases to reach a resolution. Microsoft Chairman Bill Gates and CEO Steve Ballmer had been scheduled to testify at the trial.

"I got to say it feels good to put these old allegations to rest," said Rich Wallis, the associate general counsel for Microsoft.

"Some cases just need to go on for a while longer before the parties can find their way to a resolution that works. Microsoft has always been willing to resolve this case on reasonable terms. That opportunity presented itself here and we took advantage of it," he said.

Microsoft has been involved in about 20 state antitrust class action suits, including one in the District of Columbia, since 1998, according to Microsoft. The Iowa settlement marks the 18th case to come to a resolution. A suit in Mississippi is ongoing with a hearing scheduled for the end of February, and one in Michigan that was dismissed is on appeal, according to Wallis.

Businesses and individuals residing in Iowa who have proof that they purchased certain Microsoft operating systems, or Microsoft applications such as Word, Excel or Office, between May 18, 1994, and June 30, 2006, qualify as class members entitled to the settlement. The qualifying operating systems include: MS-DOS, Windows 95, Windows 98, Windows 98 Second Edition, Windows Millennium Edition, Windows for Workgroups, Windows NT Workstation, Windows 2000 and Windows XP.

As part of the deal, Microsoft will also give the Iowa Department of Education half of any unclaimed proceeds from the settlement in computer hardware and software purchases. The term is similar to agreements in other states.