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San Francisco sues Microsoft

San Francisco sues Microsoft

DESPITE numerous out-of-court settlements with various state governments around the US, it appears Microsoft's legal woes are not over yet.

The city and counties of San Francisco and Los Angeles and the counties of Santa Clara, San Mateo, and Contra Costa, all in northern California, announced on Monday a class action suit for the recovery of damages.

The suit claims that unlawful profits were garnered by Microsoft "as a result of Microsoft's combinations to restrain trade, destroy competition and monopolise the world markets for personal computer operating systems and word processing and spreadsheet software applications through a broad spectrum of acts and practices that have violated the antitrust and unfair competition laws of the State of California."

According to the lead counsel for the plaintiffs, Eugene Crew of Townsend and Townsend and Crew LLP, in the original out-of-court settlement between California and Microsoft the judge excluded city and county governments from participating in the settlement.

"The suit was settled for private consumers. Government consumers are every bit as deserving," says Crew. "They deserve to get the overcharges back."

Crew claims that Microsoft acquired an illegal monopoly, which is unlawful conduct, and then exercised that illegal monopoly to charge monopoly prices.

"They not only robbed the bank, but they stole the gun they used to rob it with," says Crew.

Although no dollar figure was put on the suit, Dan Furniss, partner at Townsend and Townsend and Crew, says the original settlement with the State of California for non-governments, which included consumers and businesses, was for about US$1.1 billion reimbursements for overcharges. Furniss says that the city and counties of California were about 13 per cent of total Microsoft sales in the state.

The suit, if it goes to trial, can take as long as two to three years to be settled, according to Furniss, noting that the California suit was settled one month before the trial date.

Stacy Drake, a spokeswoman for Microsoft in the US says that the company believes it has provided very competitive prices for its customers. As to the suit itself, Drake says that Microsoft had just learned of it on Friday.

"Our legal team has not had a full opportunity to review and understand the complaint," says Drake.


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