Microsoft Lawsuits Begin
In the wake of a federal judge's conclusion that Microsoft Corp. is a monopoly, lawyers have begun filing class-action lawsuits alleging the software giant used its control on the market to overcharge customers.
Class-action attorneys in California were expected to file one suit against Microsoft Monday in that state's courts.
An attorney filed suit in federal court last week in New Orleans, seeking to represent millions of Windows 98 owners nationwide, alleging that Microsoft used intimidation to reduce consumers' choices and force them to pay higher prices.
And earlier this month, a small advertising company in New York City filed a suit that seeks class-action status to represent thousands of New York State customers.
The New York filing by Seastrom Associates Ltd. was the first to follow U.S. District Judge Thomas Penfield Jackson's finding that Microsoft is a monopoly that has stifled competition.
The lawsuits could signal a flood of private litigation stemming from the Justice Department's antitrust action against Microsoft.
"This is the start of the race to get to the courthouse," Stephen Axinn, an antitrust lawyer with Axinn, Veltrop & Harkrider, told The New York Times in a story Monday about the planned lawsuit in San Francisco.
"It could be like the tobacco litigation, in the sense that you have lots of plaintiffs lawyers in different states sharing information."
Microsoft has played down its risk from private antitrust lawsuits.
"That litigation is something we're prepared to defend and defend aggressively, if necessary," Microsoft lawyer Tom Burt told The Times.
The class action lawsuit that was to be filed Monday in Superior Court in San Francisco does not estimate the financial damage to Windows users in California. Nor does it specify the number of members in the class of both individual and corporate users of Windows software.
Terry Gross, one of three lawyers behind that court action, said that the number in California was "at least 10 million." Gross told The Times that the lawsuit covers Windows users since the introduction of Windows 95.
The New Orleans lawsuit alleges that Microsoft concluded that it could have made a profit it if charged consumers $49 for a Windows 98 upgrade, but it instead set an $89 price. That means each potential plaintiff's actual damages could be $40, though federal law allows triple damages for antitrust violations.