Microsoft is to pay out $1.1 billion to a group of California consumers who accused the software firm of maintaining an unfair software monopoly and overcharging.
The suit - filed in San Francisco more than two years ago and due to go to trial next month - alleged that Microsoft violated California's antitrust and unfair competition laws. The settlement came two months after a federal judge endorsed a settlement between Microsoft and the government, ending a four-year battle over the company's illegal bullying of competitors.
The consumers had claimed that millions of consumers in California had overpaid Microsoft for their products due to its monopoly. The $1.1 billion will be distributed to the members of the class action suit in the form of vouchers that can be used to buy any manufacturer's desktop, laptop and tablet computers with any software.
"This is one of the largest settlements ever reached under the antitrust or unfair competition laws of California," said the consumers' lawyer Eugene Crew.
There’s the prospect of more legal trouble for Microsoft still to come after a federal judge refused to dismiss antitrust cases filed against the company by two small rival software companies - Be and Burst.com. Be, which dissolved as a company last year, has alleged it was excluded from competing in the market for computer operating systems when Microsoft pressured computer makers not to ship computers with two operating systems. Burst says Microsoft forced it out of the market for video-streaming software by pressuring chip-maker Intel Corp and RealNetworks Inc not to support Burst technologies.
Microsoft had argued that there was doubt about how far its actions had impacted on the two firms, but US district judge J Frederick Motz said he would allow the cases to proceed. "I am satisfied there are sufficient allegations as to federal antitrust claims," Motz said in court after hearing arguments from the parties.