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Microsoft to Settle Windows Lawsuit

October 01, 2003|Joseph Menn | Times Staff Writer

Microsoft Corp. agreed Tuesday to pay about $10.5 million in cash to hundreds of thousands of consumers who accused the software giant of overcharging for its flagship Windows computer operating system.

The settlement applies to about 550,000 people who bought Windows directly from Microsoft through its Web site or a direct solicitation. The company didn't admit any wrongdoing in the pact, which awaits approval by U.S. District Judge Frederick Motz in Baltimore.

The suit claimed that the buyers had been overcharged because Microsoft had improperly used its monopoly power to stifle competition. Initiated as a formidable federal class action, the suit lost power in 2001 when Motz eliminated millions of potential plaintiffs who bought the Windows software from computer companies or retailers.

Microsoft's payments would amount to $19 per copy of Windows. The company earns $10.5 million every nine hours.

It is unclear how a court-appointed administrator will find those eligible. Microsoft referred that question to the plaintiffs' attorneys, who couldn't be reached late Tuesday.

Microsoft shares fell $1.03 to $27.80 on Nasdaq before the settlement was announced.

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