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Sat, Jul 03, 2004 - Page 12 News List

Microsoft pays US$241m to end class-action suit

MINNESOTA CASE The settlement will include vouchers for individuals and businesses, millions for schools plus at least US$59 million for lawyers


Microsoft Corp will pay up to US$241.4 million to settle a class-action lawsuit brought by Minne-sota computer users who claimed that the software company overcharged them.

The settlement outlined in court for the first time on Thursday provides millions of dollars for consumers, school districts, the University of Minnesota and legal assistance for the poor.

The biggest portions include US$174.5 million in vouchers for individuals and businesses and as much as US$59.4 million in attorneys' fees. The attorneys' final take will have to be approved by Hennepin County District Court Judge Bruce Peterson, who gave preliminary approval to the rest of the settlement.

Microsoft admitted no wrongdoing in the settlement, which was reached seven weeks into a jury trial that began in March.

"It's a great settlement. We did some good here," said plaintiffs' attorney Daniel Hume. The plaintiffs have claimed that at least 1 million Minnesota consumers and businesses will benefit from the settlement.

Separately, Microsoft also said Thursday that it would pay up to US$9.7 million to settle charges that it violated Vermont's consumer fraud act.

As part of the proposed settlement, the company will provide vouchers for Vermont residents who purchased certain Microsoft products between March 31, 1995, and Dec. 31, 2002.

Half the money left over after the consumer vouchers have been paid out will be distributed to Vermont schools, also in the form of vouchers for either hardware or software.

In the Minnesota case, consumers who qualify will be notified starting Tuesday about the vouchers, which they can use to buy computer software and equipment -- from Microsoft or any other company.

The voucher for someone who bought Microsoft Office, for instance, will be US$23.

Besides consumers, Minnesota school districts stand to gain the most from the settlement.

``The major beneficiaries of this agreement are consumers and Minnesota public schools,'' said Richard Hagstrom, the lead plaintiffs' attorney.

Microsoft's total payout will be less than the amount outlined in the settlement, said David Tulchin, a Microsoft attorney.

Attorneys' fees will be determined later, and only a fraction of consumers -- perhaps as few as 20 percent, based on figures from other settlements -- will likely claim their vouchers, he said.

Microsoft recently settled with two major rivals, agreeing to pay US$440 million to InterTrust Technologies Corp to settle a patent infringement lawsuit and US$1.6 billion to Sun Microsystems to settle a private antitrust lawsuit and resolve patent claims.

The company also faces class action cases in several other states.

The Minnesota case was the first state-level class action suit against Microsoft to go to trial.

Tulchin said on Thursday that the company had a solid case. He said chairman Bill Gates "wanted to be here. He wanted to tell the jury about Microsoft and what is good about it."

But he said the company settled to avoid the potential of a jury verdict that favored the plaintiffs, and to avoid disruption at the company.

"How much is a week's worth of Bill Gates' time to shareholders? A lot," he said.

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