MICROSOFT SETTLES CLASS ACTION LAWSUITS

[AussieMark]

Microsoft Settles Suits in 5 States, D.C.

SEATTLE - Microsoft Corp. has agreed to settle class-action antitrust and unfair competition lawsuits brought by customers in five states and the District of Columbia for vouchers worth $200 million.

The settlements announced Tuesday would end those lawsuits in Kansas, North Carolina, North Dakota, South Dakota and Tennessee, in addition to Washington, D.C.

The Kansas case was settled for $32 million and the District of Columbia case was settled for $6.2 million, said Brad Smith, Microsoft senior vice president and general counsel. He did not give figures on the other lawsuits settled.

All the cases involve customers who joined in class actions alleging that Redmond-based Microsoft violated state antitrust laws and laws against unfair competition.

In all, Microsoft has now settled similar lawsuits in nine states and Washington, D.C., for a total of $1.55 billion. Agreements were announced earlier this year for lawsuits in California, Florida, Montana and West Virginia.

The company said class actions are still pending in Arizona, Iowa, Minnesota, New Mexico and Wisconsin.

Under the settlements, Microsoft will provide vouchers for customers to purchase hardware, operating systems, training and software from various vendors including Microsoft. Half of the unused vouchers will be given to schools to help needy children.

"To look at all this in perspective, it's clear that we've made a good deal of progress in the past year and it's clear that we have to keep focusing, keep moving forward," Smith said.

He said the company is working to improve relationships with other companies and with the government.

The company said agreements in Kansas and Washington, D.C., have already been approved by the courts. Settlements in four other states — North Carolina, North Dakota, South Dakota and Tennessee — still must be approved by the courts.

Microsoft said it has already set aside adequate reserves for the settlements.

Microsoft's stock closed at $27.20, up 29 cents, or 1.1 percent on the Nasdaq Stock Market.

Matt Rosoff, an analyst with Directions on Microsoft, an independent research firm in Kirkland, Wash., near Microsoft's Redmond headquarters, said the most recent settlements are "fairly small" but the amounts have added up.

"It's not a hugely significant amount but it does count against income, with $100 million here and there," he said.

Microsoft hasn't yet cleared the thicket of antitrust lawsuits filed by governments, competitors and customers. Still pending are an antitrust lawsuit filed by Sun Microsystems and an anticompetitive lawsuit filed by Burst.com, a company that makes technology for streaming movies and sounds.

In addition, the state of Massachusetts is contesting a landmark antitrust settlement approved by a federal court last year, with a hearing scheduled next month before the U.S. Circuit Court of Appeals (news - web sites). The U.S. Justice Department (news - web sites), Massachusetts and 18 other states had sued over Microsoft's use of the Windows operating system to muscle out rivals