January Brings Legal Setbacks

Microsoft faced two legal setbacks in early Jan. 2002, as judges rejected a proposal to settle more than 100 private antitrust lawsuits with a donation to disadvantaged school districts and denied a request to delay a remedy hearing in the federal antitrust case.

Class-Action Settlement Rejected

The largest setback came in a class action suit before Judge J. Frederick Motz in the federal district of Maryland. The case involves more than 100 individual plaintiffs who allege that Microsoft used its monopoly power to overcharge for Windows. In Dec. 2001, Microsoft and the lawyers representing most of the plaintiffs reached a settlement under which Microsoft would distribute about US$1 billion worth of software, hardware, technical assistance, and cash to about 16,000 of the poorest schools in the United States. A group of lawyers representing plaintiffs from California refused to sign the settlement, saying that Microsoft should reimburse customers directly. Apple Computer also objected to the settlement, claiming that it would give Microsoft an unfair advantage in the education market, one of its strongest segments.