The lawsuit, filed Friday in San Francisco Superior Court, is the latest in a string of similar actions brought against Microsoft across the country. The plaintiffs include San Francisco and Los Angeles.
The local governments are asking a judge to make the case a class action on behalf of all California cities and counties. If a judge approves the lawsuit as a class action and Microsoft is found liable, the Redmond, Wash., company could be liable for many millions of dollars, perhaps billions.
"It's anticompetitive, it's predatory, and it denies consumers, and in this case taxpayers, the benefits of innovation that a free marketplace should provide," said San Francisco City Attorney Dennis Herrera.
Last month, a San Francisco Superior Court judge granted final approval to a $1.1 billion settlement between Microsoft and California consumers who accused the company of violating state antitrust and unfair competition laws--nearly the same accusation made in the suit filed Friday.
Similar class-action lawsuits were filed in at least 16 other states on behalf of consumers. The company has agreed to settle 12 of those cases, including a $104 million settlement in Arizona and a $34 million settlement in Massachusetts.
They're separate from the antitrust case that Microsoft settled in 2002 with the Justice Department and several states.
Microsoft spokeswoman Stacy Drake said the company's lawyers hadn't fully reviewed the lawsuit, but she defended the company's prices.
"In fact," she said, "we've built our business on delivering innovative software at low prices, and have been the market leader in reducing prices while increasing the value contained in software."