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Microsoft Antitrust Suits Settled

October 29, 2003|From Bloomberg News

Microsoft Corp., the world's largest software maker, said it would pay about $200 million to settle antitrust class-action lawsuits accusing the company of overcharging customers in Kansas, North Carolina, North Dakota, South Dakota, Tennessee and the District of Columbia.

The company has agreed to pay a total of about $1.55 billion in settlements in 10 states where suits accused Microsoft of using its Windows computer operating system monopoly to gouge consumers. Five states' suits still are pending and those in 17 others have been dismissed, general counsel Brad Smith said.

Smith said the company has made progress in resolving its legal issues. Still, a European Commission suit and an appeal by Massachusetts of the Justice Department's settlement with Microsoft could force the company to change the way it does business or pay additional fines. The European Commission could fine Microsoft more than $3 billion.

"We are past the halfway point, but we appreciate that important issues remain," he said. "It would be unwise for us to take anything for granted. It's premature to say these issues are behind us."

Smith mentioned Sun Microsystems Inc.'s suit, the European Union investigation and the Massachusetts appeal as the biggest legal threats facing the company.

He said the new settlements don't require the company to adjust its financial forecast or take additional charges for legal costs.

The settlements in Kansas for $32 million and the District of Columbia for $6.2 million have received preliminary approval from the courts, he said. In the largest settlement, Microsoft previously agreed to pay $1.1 billion to California consumers, a group potentially numbering 14 million.

The settlements give consumers who bought Microsoft programs vouchers they can use to buy computers and software from Microsoft or competitors. Half of the unclaimed funds are given to schools to purchase software and computers.

Microsoft was accused of exploiting its Windows software monopoly to raise prices. Windows runs more than 90% of the world's personal computers.

Shares of Redmond, Wash.-based Microsoft rose 29 cents to $27.20 on Nasdaq.

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