Microsoft Closes Out Calif. Lawsuits

Microsoft has closed another antitrust case to stem from the U.S. government’s antitrust case against it over monopoly abuse.

The latest case is a $70 million settlement to resolve a class action lawsuit filed in August 2004 by the city and county of Los Angeles, the city and country of San Francisco counties, as well as the counties of Santa Clara, San Mateo and Contra Costa.

The cities and counties alleged that Microsoft engaged in anticompetitive conduct and used its market power to overcharge the governments for its products.

The municipalities filed the suit after Microsoft settled a similar lawsuit brought by California consumers and private businesses for $1.1 billion.

“The governments came to us and said that, if there was a monopoly overcharge, they had also paid too much for technology,” said Richard Grossman, the lead attorney with the law firm of Townsend and Townsend and Crew, which brought the most recent suit.

Microsoft did not acknowledge any wrongdoing, and issued a statement intended to mend political fences.

“We value our relationship with these cities and counties and are pleased to reach a settlement that allows us all to focus on the future,” said Tom Burt, corporate vice president and deputy general counsel for Microsoft.

The $70 million will be divided among the State of California and local government entities in the form of vouchers, which will be used to obtain cash refunds for future technology purchases. The entities will get reimbursed for purchases of both Microsoft and non-Microsoft hardware and software.

“This antitrust settlement will provide state and local governments with a fabulous opportunity to obtain their choice of a wide variety of computer products sold by any competitor in the market,” Grossman told

The parties are negotiating a final settlement agreement to be presented to the court for approval in City and County of San Francisco v. Microsoft Corporation. The case is pending before Frederick Motz in the United States District Court for the District of Maryland.

Other cases of a similar nature are still pending before court, including one by consumers in the state of Iowa.

In February of this year, Microsoft began distributing $55 million worth of vouchers to Minnesota public schools as part of a settlement reached with the state of Minnesota.

Since 2004, the company has also settled antitrust or anti-competitive class action lawsuits with the states of Arizona, Massachusetts, Nebraska, New Mexico and Vermont. Vouchers will also issued in all of those cases.

As for the antitrust case in Europe, closing arguments were heard last Friday. A ruling is expected within 90 days.

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