Private MS suit gets class action status

Microsoft Corp. is facing class action lawsuits for allegedly using its monopoly power to overcharge customers who bought its Windows operating system in California, Arizona and now in Minnesota. More states are expected to be added to the list soon, attorneys filing complaints said.

Most recently, a Minnesota state court judge on March 30 ruled that a consumer antitrust suit could move forward as a class action case, according to Joanne Cicala an attorney with the law firm Kirby McInerney & Squire LLP in New York, which is representing a Minnesota plaintiff.

Microsoft has said accusations that it has overcharged for Windows are false.

In January a U.S. district judge in Maryland sided with the company when it dismissed 38 of 62 antitrust suits filed against Microsoft under federal law, saying the Redmond, Washington, company could not be sued by consumers who bought Windows through a third-party vendor. Those customers' new computers had arrived with the operating system already installed by hardware manufacturers. The customers are appealing the Maryland judge's ruling, Cicala said.

Unlike federal antitrust law, Minnesota state law lets indirect purchasers sue for damages. The Minnesota class action suit has four named plaintiffs and will seek other parties that have similar overcharging complaints following acquisition of Microsoft Windows or MS-DOS software since May 1994, Cicala said. The suits address overcharging complaints regardless of how they purchased the operating systems and do not focus solely on third-party purchases, she said.

Nine lead law firms are working on the overcharging claims against Microsoft, Cicala said. They are seeking class action status in Maine, Wisconsin, South Dakota and Michigan, she said. The list is expected to grow to include Florida and West Virginia, Cicala said.

The filing of lawsuits alleging Microsoft overcharged customers for its operating systems began after U.S District Court Judge Thomas Penfield Jackson's November 1999 ruling that the company did have a monopoly with its Windows operating system. Based on the notion that a monopoly would allow Microsoft to overcharge for its software, over 150 cases were filed in both federal and state court against the company, Microsoft spokesman Jim Cullinan said.

Microsoft's pricing is in line with what other vendors like Apple Computer Inc. charge for their operating systems, Cullinan said, adding that the company spends heavily on research and development to keep its OS up to date.

"Basically, they are saying Microsoft is charging a monopoly price for Windows, and we don't think that is even close to the truth," said Cullinan. "Any suggestion that Microsoft is overcharging is simply false," he said.

None of the cases has gone to trial at this point, and Cullinan does not expect any to reach trial until 2002.

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