Microsoft Settles Calif. Antitrust Suit for $70 Million
Microsoft Corp. will pay $70 million to thousands of California government
agencies in the latest legal settlement spurred by price-gouging allegations
against the world's largest computer software maker.
The proposed truce covers a wide range of taxpayer-backed agencies -- from
local school districts to regional transportation systems -- that bought Microsoft
products dating back to 1995.
If the settlement gains court approval later this year, Microsoft will divide
the $70 million among the eligible government agencies as they buy computers,
printers and software, including brands that compete against Microsoft.
The proposed payments are similar to a $1.1 billion pool that Microsoft set
up for California consumers and businesses in 2004 after settling a lawsuit
alleging the software maker had abused its power in the computing industry to
Although Microsoft has consistently defended its prices as fair and reasonable,
government regulators, customers and business rivals have long insisted that
the software maker leveraged its Windows operating system -- the brains of most
personal computers -- to build an unfair market advantage.
The backlash unleashed a tidal wave of lawsuits, including a closely watched
antitrust case filed by the U.S. Justice Department. That showdown culminated
in a 2002 settlement.
Redmond, Wash.-based Microsoft spent billions resolving other suits brought
by rivals like AOL Time Warner Inc. and Sun Microsystems Inc., as well as other
Led by the cities of San Francisco and Los Angeles, the California government
agencies filed their suit in 2004. The counties of Santa Clara, San Mateo, Los
Angeles and Contra Costa also joined in the action.
In a statement Tuesday, Microsoft denied it did anything wrong. "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, Microsoft's
deputy general counsel.
San Francisco lawyer Richard Grossman, who represented the government agencies,
said his clients were "delighted" with the settlement.
The agreement still requires the approval of U.S. District Judge J. Frederick
Motz in Baltimore. The California agencies originally sued in San Francisco
Superior Court, but the case was transferred to Maryland, where Motz is overseeing
several other similar suits against Microsoft.