Microsoft settles class-action suits

Microsoft Corp. has settled antitrust class action lawsuits with five states and the District of Columbia, the company announced Tuesday.

"We've worked hard over the last few months, and indeed over the last two years, to address these legal challenges and to move forward to build more constructive relationships with the government and with others in industry," said Brad Smith, Microsoft senior vice president and general counsel.

The six new settlements, with a total value of about US$200 million, brings the total number of states that have settled to 10. Class action lawsuits against Microsoft for antitrust-related practices continue in five states. The total cost to Microsoft of all 10 class-action lawsuits it has settled is about $1.55 billion, including a $1.1 billion settlement of a California lawsuit in January.

Two of the six settlements discussed Tuesday, with Kansas and the District of Columbia, have been granted preliminary approval by the overseeing courts, Smith said. The settlements, in the form of hardware or software vouchers to past purchasers of Microsoft software, will be $32 million for Kansas and $6.2 million for the District of Columbia.

Settlements in four other states -- North Carolina, Tennessee, North Dakota and South Dakota -- have not been approved by courts, and Microsoft did not release the details of those settlements Tuesday. Plaintiff lawyers in North Carolina announced an $89 million settlement in June, but Smith said the court has not approved that agreement and he did not provide details of that settlement when he announced it Tuesday.

The six new settlements are similar to settlements Microsoft has announced with Montana, California, Florida and West Virginia. Half of the value of any unclaimed vouchers will go to needy schools in the settling states. The schools can purchase hardware, software or technical training with the money, and neither the consumers nor the schools are required to purchase Microsoft products with the vouchers.

Class-action lawsuits remain in Arizona, Iowa, Minnesota, New Mexico and Wisconsin. Class-action lawsuits in 17 other states have been dismissed or had class action certification denied, Smith noted.

In addition, Microsoft continues to face private antitrust lawsuits from Sun Microsystems Inc. and Burst.com Inc., as well as an investigation by the European Union. One state, Massachusetts, continues to appeal the antitrust ruling approved by a U.S. District Court judge in November 2002, although 18 others have ended their antitrust claims against Microsoft.

Microsoft has "passed the half-way point" in antitrust litigation against it, Smith said.

"If you look at all these things in perspective, it's clear we've made a good deal of progress over the year, and it's clear that we have to keep focusing on moving forward in this way," Smith said.

Microsoft is attempting to build better relationships with other companies in the IT industry and government entities, Smith said.

"We very much recognize as a company that the litigation that we've experience over the last five years was, to some extent, a reflection of the disagreements that existed in the industry more broadly," Smith added. "As we put more of these lawsuits behind us, we need to stay focused as a company on continuing to improve all relationships with the industry and government."

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