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Microsoft Faces Antitrust Allegations in Nevada

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Case ID: 3265 | Technology | 03/25/2004

A class action has been filed against Microsoft Corporation on behalf of Nevada residents who allege that the software giant used its monopoly power to overcharge them for its Windows operating system in violation of state antitrust laws. The action seeks unspecified compensatory and punitive damages.

After a lengthy trip through the appellate courts and to the Nebraska Supreme Court, case is now being sent back to the district court for further hearings. The Nebraska Supreme Court recently reversed prior lower court decisions that were beneficial to Microsoft, and has ruled that indirect purchasers in Nebraska can sue on antitrust grounds. It reasoned that, since end-users are the ones normally affected by monopoly pricing abuse, they should have the right to bring the suit. In indirect purchaser is anyone who purchases an item from a middleman instead of the company that produces the item.

"To deny the indirect purchaser, who in this case is the ultimate purchaser, the right to seek relief from unlawful conduct, would essentially remove the word consumer from the Consumer Protection Act," the court said in its majority opinion. On the federal level, similar lawsuits against Microsoft were dismissed last year because of this very issue.

The Nebraska ruling came at the end of a busy legal week for Microsoft. Elsewhere in the U.S., opening arguments began in Minnesota, in a class action that also accuses Microsoft of overcharging for software. Lawyers in that case are seeking as much as $452 million for software sold in the state. Thus far, in the wake of the U.S. government's antitrust case, in which a settlement was approved in November 2003, Microsoft has settled antitrust-related consumer lawsuits in states including California, Tennessee, North Dakota, South Dakota, and Kansas.

Antitrust settlement talks between European Union and Microsoft recently broke down. The EU is expected to announce a series of antitrust remedies, including a fine, that could set a precedent that will make it easier to prosecute other complaints in Europe.


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