Microsoft chalks up more class-action settlements

The company reaches settlements that total approximately $200 million in six class-action lawsuits that involve antitrust claims and product pricing. Ten down, five to go.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
2 min read
Microsoft said Tuesday that it has reached settlements that total approximately $200 million in six class-action lawsuits that involve antitrust claims and product pricing.

With the just-announced agreements, 10 such suits have been settled to date, leaving five still in the courts. Microsoft also said it has successfully derailed class-action lawsuits in 17 other states, either by having them dismissed or by convincing courts not to grant class certification.

Ever since a federal judge ruled in April 2000 that Microsoft enjoyed an operating system monopoly and violated antitrust laws, the world's largest software company has found itself fighting off a swarm of private lawsuits that involve claims that it used its Windows monopoly to overcharge consumers on various products.

On Sept. 30, Microsoft said it would pay $10.5 million to settle one private antitrust lawsuit, and in May the company said it would pay America Online $750 million to resolve an antitrust complaint filed in 2002. In March, Microsoft paid $12.3 million in vouchers to settle class-action suits that were filed in Montana.

Brad Smith, Microsoft general counsel, said during a conference call that the newly announced settlements show that the company is moving toward putting such legal actions behind it. "We are well on our way in resolving our consumer class-action lawsuits," Smith said. "We have made important progress."

Of the six settlements Microsoft announced Tuesday, those reached with Kansas and the District of Columbia have been granted preliminary approval by the courts. Judges in four other states--North Carolina, North Dakota, South Dakota and Tennessee--have not ruled on the settlements.

As with the mammoth $1.1 billion California settlement it announced in January, Microsoft won't be writing checks to individual consumers. Instead, the payments to certain state residents will be in the form of vouchers that can be used to buy desktop, laptop and tablet PCs, as well as peripherals for those devices. "Consumers can use the vouchers to purchase the product they want for the platform of their choice," Smith said.

Of the vouchers consumers leave unclaimed, half of the funds will go to public schools in each individual state, and Microsoft will keep the other half.

The company used its announcement of the settlements to put a positive face on its interminable legal woes, noting that the U.S. Department of Justice has settled its antitrust suit and that of the 20 state attorneys general who originally sued, only the attorney general, in Massachusetts, continues to litigate. Of the four competitors that brought suit, AOL and Be Inc. have reached settlements with Microsoft. Cases that involve Sun Microsystems and Burst.com are still pending.

Smith stopped short of declaring total victory, noting that the 4th Circuit Court of Appeals in Richmond, Va., would hear the Sun v. Microsoft case Wednesday. "It would be unwise for us to take anything for granted," Smith said. "It would be premature to say that (our legal troubles) have been resolved."