Deadline Extended in California MS Settlement

Businesses and consumers now have until January 8, 2005 to file claims in the state of California’s antitrust settlement with Microsoft .

On Thursday, Federal Judge Paul Alvarado approved the settlement of antitrust claims filed by the state against the Redmond software vendor.

Last year Microsoft settled antitrust lawsuits that claimed the company used its monopoly power to overcharge buyers of its software products. As a result of the settlement, some 14 million California consumers and businesses are eligible to collect refunds on past purchases of Microsoft’s Windows operating systems and applications software.

According to the settlement, Californians would have a final 30 days to file claims after the judge signed off on the agreement. Townsend and Townsend and Crew, the firm that was lead counsel in the class action case against Microsoft, negotiated an extra thirty days, for a total of 60 days from signature.

“For consumers it’s a great deal, simple, quick and substantial,” said Richard Grossman, an attorney with Townsend. “For businesses, it’s even better.”

Grossman said even the smallest businesses might recover thousands of dollars, while the largest businesses will recover millions. Some multi-million dollar claims already are on file. Claims should begin to be paid soon after the deadline, Grossman said, unless any participants in the class appeal the settlement.

Companies that participated in Microsoft’s volume license programs can simply check a box on the claim form; Microsoft will match their company names to its database records and calculate the worth of the claim. The company also offers a toll-free number and information on the volume-licensing customer Web site on how to get help with license validation.

According to Townsend, the average refund will amount to about 22 percent of the money that businesses and consumers spent on key Microsoft products during a seven-year period. Anyone who bought specified operating systems or software from February 18, 1995 to December 15, 2001, for use in California, is eligible to file a claim.

After an initial gush of claims, filings slowed. But Grossman said he expects filings to pick up as the deadline looms.

“Typically, you get a big rush with the start of the claims period and another with the publicity about the deadline,” he said. “It’s like filing tax returns.” To date, about 622,000 claims have come in.

Townsend has done extensive outreach. It maintains a Web site where claim forms can be printed and mailed. As well, 18 million claim forms were mailed and 7 million more were e-mailed.

Microsoft was the subject of class action suits brought on behalf of consumers in 18 states. The suits claimed that because the company dominated the market, it could and did overcharge for its software. But the states split over a deal brokered by the U.S. Department of Justice. Half of them dropped out of the settlement talks and prosecuted their own suits, including California.

“There were efforts by others to take over the litigation and settle it for chump change, and we had to resist that to get the fabulous settlement we did,” Grossman said. “The final recovery we obtained was eight times what they were willing to settle for.”

As in other state settlements, Microsoft gets to keep a portion of any unclaimed settlement funds. In California, Redmond gets one third of any money left over, with underprivileged school districts getting the remainder. (Most state settlements let Microsoft recover half the unclaimed funds.)

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