Microsoft settles Minnesota pricing suit

Microsoft has reached a preliminary settlement in a class-action lawsuit in Minnesota. The US state had alleged that the company...

Microsoft has reached a preliminary settlement in a class-action lawsuit in Minnesota. The US state had alleged that the company abused its Windows monopoly to overcharge customers for its software.

The terms of the settlement will remain confidential until they are finalised sometime in early July.

The Minnesota case is one of several class-action lawsuits brought against Microsoft on behalf of consumers in the wake of the US government's antitrust case that the supplier had been unable to settle or get dismissed.

Cases in Arizona, New Mexico and Iowa could still go to trial, and last month the Nebraska Supreme Court reversed earlier rulings that blocked a consumer class action case in that state.

New York, Ohio, Wisconsin and Michigan courts have, initially, declined to certify classes of consumers, but plaintiffs are appealing those decisions, Microsoft spokesman Jim Desler said.

Cases in Vermont and Massachusetts are also still active, but are not as close to going to trial as the Arizona, New Mexico and Iowa cases because classes of consumers have not yet been certified.

In settlements reached with lawyers representing consumers in states including California, Tennessee, North Dakota, South Dakota and Kansas, Microsoft agreed to make vouchers available to customers who bought Microsoft software during a specific time period. The vouchers can be used to buy computer software or hardware.

As part of the settlements, Microsoft has always denied any wrongdoing.

"We remain confident in our case, and that did not change at all during trial," said Microsoft spokeswoman Stacy Drake, adding that  Microsoft is not admitting guilt as part of the Minnesota settlement.

Settlement negotiations had continued off and on during the trial and bore fruit on Friday, Drake said.  "We have said from the beginning that we would be open to looking at reasonable ways to settle this case."

Lawyers for the Minnesota plaintiffs were seeking damages of as much as $505m, accusing Microsoft of having overcharged software buyers in the state between 1994 and 2001, said Rick Hagstrom, lead counsel for the plaintiffs and a partner at Zelle Hofmann Voelbel Mason & Gette. The damages amount could have been trebled under Minnesota law, he added.

"We were putting on our evidence and we were happy with how the case was proceeding."

Earlier this month Microsoft agreed to pay $1.6bn to Sun Microsystems to settle a private antitrust suit and resolve patent issues, and $440m to InterTrust Technologies to end a dispute over digital rights management patents.

"Microsoft is making a real drive to take care of some of these cases and that could free up cash to be used for other purposes," said Matt Rosoff, an analyst at Directions on Microsoft, referring to Microsoft's $52.8bn in cash and short-term investments. The company had said it was holding onto that money partly because of legal uncertainties.

Among the other cases that Microsoft still has to resolve is a European antitrust case. The European Commission last month fined Microsoft £331m for anticompetitive behaviour. Microsoft is appealing the decision.

Joris Evers writes for IDG News Service

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