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Microsoft Settles Minnesota Class-Action Suit

Customers in the state had claimed that the company overchanged them in violation of state antitrust laws.
MINNEAPOLIS (AP) -- Microsoft Corp. said Monday it has reached a settlement of a class-action lawsuit brought by Minnesota customers who claimed the software giant overcharged them in violation of state antitrust laws.

The world's biggest software company said final terms of the settlement were still being worked out. The deal will be presented to the state court in early summer, company spokeswoman Stacy Drake said. She declined to say whether the settlement would affect Microsoft's earnings.

A message on a trial information line said the settlement would be presented in early July.

The settlement interrupted a jury trial that was expected to last several more weeks. Attorneys for the plaintiffs had said they were seeking as much as $505 million--and Minnesota law would have automatically tripled that, meaning Microsoft could have faced a potential payout of more than $1.5 billion, said Microsoft attorney David Tulchin.

"From Microsoft's perspective it's a good thing for the company to move on and focus on making good software and making good products that have value for consumers," he said.

Tulchin said negotiations had continued off and on during the trial, and resumed more intensely last week. The final agreement was reached on Friday, and made public on Monday when jurors were dismissed. Tulchin said the company won't ask for the settlement to be sealed.

An attorney for the plaintiffs did not immediately return a message from The Associated Press seeking comment.

The suit alleged that Microsoft had violated Minnesota antitrust law by overcharging for its Windows operating system and its Excel and Word programs. The company had denied the overcharges, saying the prices on its products had dropped.

Microsoft had previously settled with nine states and Washington, D.C., paying out a total of $1.5 billion. Cases in 16 other states were dismissed.

A case brought by the federal government ended with a settlement in 2001 that found that Microsoft used its operating system monopoly to strong-arm competitors. The trial judge ordered a breakup of Microsoft, but a federal court overruled the decision. It did, however, uphold the judgment that Microsoft held a monopoly with Windows.

The proposed resolution in Minnesota follows two settlements earlier this month between Microsoft and major rivals.

The computer software concern agreed last week to pay $440 million to InterTrust Technologies Corp. to settle a 3-year-old patent infringement lawsuit over technology for protecting music, movies, and other digital content against piracy.

On April 2, Microsoft agreed to pay Sun Microsystems $1.6 billion to settle a private antitrust suit and resolve patent claims.

The settlements are part of a pattern of Microsoft trying to clear the court cases pending against it, said Matt Rosoff, analyst with independent researchers Directions on Microsoft.

"I don't think Microsoft was necessarily balking over the amount" of a potential settlement in the Minnesota case, Rosoff said. "They've got $53 billion in the bank, so it's not a large burden to make some decent-sized payouts. What it doesn't like is when a government body or somebody else tries to restrict their abilities for product design."

He said Microsoft may have settled the Minnesota case because the plaintiffs were seeking curbs on Microsoft's future behavior.