TELECOM Digest OnLine - Sorted: Microsoft Settles California AntiTrust Suit

Microsoft Settles California AntiTrust Suit

Associated Press News Wire (
Tue, 2 May 2006 19:36:42 -0500

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 inflate prices.

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 government entities.

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

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

Copyright 2006 The Associated Press.

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