Antitrust Fallout Continues; Sendo Sues

The transition from 2002 to 2003 was a busy one for Microsoft’s legal team as the company reached a potential settlement in 27 California class-action antitrust suits; faced an injunction from a federal judge requiring it to distribute the most recent version of Sun Microsystems’ Java run time environment; and was sued by wireless phone manufacturer and former partner Sendo for conspiracy and fraud, among other things.

The activity emphasizes the fact that Microsoft continues to face fallout from the antitrust case filed by the Department of Justice (DoJ) in 1998, even though the DoJ and most of the other plaintiffs in that case have accepted a settlement. (See “Two States Appeal; Other Legal News” on page 28 of the Jan. 2003 Update.) In particular, the findings and judgments from the DoJ case are now being applied to private antitrust lawsuits. The company will reach settlements where possible to avoid further damage to its reputation.

California Settlement Proposed

Microsoft and lawyers representing California consumers have proposed a settlement for 27 class-action antitrust lawsuits. If the case had gone to trial, it would have begun with a reading of the findings of fact from the DoJ’s antitrust case, reminding the public of the company’s past illegal activity. The case would have been a difficult one for Microsoft to win because California law allows consumers to use evidence reached in other cases—in this instance, the DoJ case—and to sue monopolies directly for overcharging, even if the plaintiff bought the product in question through a reseller (such as an OEM). To avoid a difficult legal fight that could have resulted in further damage to its image, Microsoft is making an effort to settle the case.