Microsoft pays out $1.1bn but legal action continues

Microsoft has agreed $1.1bn (£680m) deal to settle private lawsuits filed by customers in California.

Microsoft has agreed $1.1bn (£680m) deal to settle private lawsuits filed by customers in California.

Around 13 million businesses and individuals in the state will be offered vouchers to purchase IT equipment and software including non-Microsoft products.

The software giant was accused of overcharging customers in California for its Windows operating system and Office productivity suite and of abusing its dominant market position.

A previous proposal to settle the legal action by offering $1bn of software to California's schools was rejected last year because critics said it could extend the Windows monopoly in the marketplace.

The cost of the offer is higher than Microsoft's estimates for a settlement and the company still faces action in 16 other US states.

Microsoft has been dogged by lawsuits accusing it of abusing its dominant position in the world's computer business. Many cases are still pending.

In a separate move, a judge in Maryland has refused Microsoft requests to dismiss antitrust claims filed against it by three rival software companies. He said there was sufficient evidence for the cases to go forward.

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