Microsoft to Cough Up $1.1 Billion to Settle Suits

Microsoft late
Friday agreed to pay up to $1.1 billion to settle class-action lawsuits
brought by California businesses and consumers who claimed the company had
overcharged for software.


The Redmond, Wash. software concern, who admitted doing no wrongdoing in the
case, said the settlement will be paid out to up to 13 million California
businesses and consumers in the form of vouchers to buy computers and
software. The vouchers, ranging from $4 to $29, will be offered to
California customers who purchased Excel or Word programs between Feb. 18,
1995, and Dec. 15, 2001.


Two-thirds of the amount not claimed will be donated to 4,700 of California
schools, according to legal counsel who worked the case. Microsoft would
keep the remaining third of any unclaimed portion. The amount of each rebate
will be set per software license.


Microsoft agreed to allow customers to search its registration database to
determine the cost of what they purchased over the timeframe. The company
will also try to contact affected parties.


According to published reports, Eugene Crew, lead attorney for the
California plaintiffs, said the settlement was a victory for consumers who
claimed they were overcharged for software. Crew said going to trial would
have posed great risks to Microsoft because the California case went beyond
the violations Microsoft committed in the case brought by the U.S.
Department of Justice.


Microsoft had previously proposed
a nationwide settlement of the class-action lawsuits that was rejected by a
judge in Baltimore a year ago. Microsoft still faces smaller claims that it
overcharged consumers in other states, including Massachusetts and West
Virginia.


Final approval of the California settlement is still pending and subject to
approval by a San Francisco court later this month.


Apart from the California settlement, Microsoft has other legal woes
pending, including its battle with rival Sun Microsystems. U.S. District
Judge J. Frederick Motz of Baltimore narrowed Sun’s antitrust suit Friday
against Microsoft and said he would rule next week on Microsoft’s attempts
to drop additional claims.


In that case, Sun scored a major coup when Motz issued an injunction against Microsoft, ordering the company to include a Java Virtual
Machine, or JVM , in its Windows XP operating system.

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