• United States

Microsoft settles Minnesota pricing suit

Apr 19, 20044 mins
Enterprise ApplicationsLegalMicrosoft

Microsoft has reached a preliminary settlement in a class-action lawsuit in Minnesota, which alleged that the company abused its Windows monopoly to overcharge customers in the state for its software.

Microsoft has reached a preliminary settlement in a class-action lawsuit in Minnesota, which alleged that the company abused its Windows monopoly to overcharge customers in the state for its software.

As a result of the settlement, the trial, which began March 15, has been concluded and the jury has been discharged, according to a statement on the Hennepin County District Court Web site. The terms of the settlement will remain confidential until finalized sometime in early July, according to the statement.

The Minnesota case is one of several class-action lawsuits brought against Microsoft on behalf of consumers in the wake of the U.S. government’s antitrust case that the vendor had been unable to settle or get dismissed.

Cases in Arizona, New Mexico and Iowa could still be headed for trial and the Nebraska Supreme Court last month reversed earlier rulings that blocked a consumer class action case in that state. In New York, Ohio, Wisconsin and Michigan courts have initially declined to certify classes of consumers, but plaintiffs are appealing those decisions, Microsoft spokesman Jim Desler said.

Cases in Vermont and Massachusetts are also still active, but not as close to going to trial as the Arizona, New Mexico and Iowa cases because classes of consumers have not yet been certified, according to Desler.

In settlements reached with lawyers representing consumers in states including California, Tennessee, North Dakota, South Dakota and Kansas, Microsoft agreed to make vouchers available to customers who bought Microsoft software during a specific time period. The vouchers can be used to buy computer software or hardware.

As part of the settlements Microsoft has always denied any wrongdoing. In earlier statements the company had also denied it did anything wrong in Minnesota.

“We remain confident in our case, and that did not change at all during trial,” Microsoft spokeswoman Stacy Drake said Monday. Microsoft is not admitting guilt as part of the Minnesota settlement, she said.

Settlement negotiations had continued off and on during the trial and bore fruit on Friday, Drake said. “We have said from the beginning that we would be open to looking at reasonable ways to settle this case,” she said.

Lawyers for the Minnesota plaintiffs were seeking damages of as much as $505 million, accusing Microsoft of having overcharged software buyers in the state between 1994 and 2001, said Rick Hagstrom, lead counsel for the plaintiffs and a partner at Zelle Hofmann Voelbel Mason & Gette LLP. The damages amount could have been trebled under Minnesota law, he said.

“We were putting on our evidence and we were happy with how the case was proceeding,” Hagstrom said.

Opening arguments in the Minnesota case began March 15. The court had allotted three months for the trial. As part of its defense, Microsoft had said it may have called Chairman and Chief Software Architect Bill Gates and CEO Steve Ballmer to testify. Because of the settlement the trial was concluded before Microsoft even started to present its defense.

Trial exhibits in the Minnesota case will be available on the court’s website until Monday, April 26. The documents offer an insight into Microsoft’s business back to the early days of the Redmond, Washington, company when it was peddling DOS.

Microsoft has been busy clearing up lawsuits filed against it. Earlier this month it agreed to pay $1.6 billion to Sun to settle a private antitrust suit and resolve patent issues, and $440 million to InterTrust Technologies to end a dispute over digital rights management patents.

“Microsoft is making a real drive to take care of some of these cases and that could free up cash to be used for other purposes,” said Matt Rosoff, an analyst at Directions on Microsoft in Kirkland, Wash., referring to Microsoft’s $52.8 billion in cash and short-term investments. The company had said it was holding onto that money partly because of legal uncertainties.

Among the other cases that Microsoft still has to resolve is a European antitrust case. The European Commission last month fined Microsoft €497 million ($597 million) for anticompetitive behavior. Microsoft is appealing the decision.