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First Antitrust Case to Go to Trial Starts in Minnesota

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Case ID: 3267 | Technology | 12/29/2004

A class action has been filed against Microsoft Corporation on behalf of Minnesota residents who purchased Microsoft operating system and application software between 1994 and 2001, who allege that the software giant used its monopoly power to overcharge them for software licenses. The action seeks up to $452 million in compensatory and punitive damages.

The action alleges that Microsoft has unlawfully monopolized operating system software with Windows and applications software, through its Word, Excel and Office programs. The company allegedly used its monopoly power to overcharge Minnesotans $10 to $70 per item, depending on the product and year.

Opening arguments started in early March 2004 in the suit. The trial, expected to take about 15 weeks, could include testimony from Microsoft Chairman and Chief Software Architect Bill Gates. Microsoft has reached settlements in any trust cases in states including California, Tennessee, North Dakota, South Dakota, and Kansas. The only other Microsoft case that went to trial was a federal antitrust lawsuit, filed by the U.S. Justice Department, which the company lost in 1999. In that case, Microsoft was found to have illegally monopolized the operating system market using Windows. The trial judge ordered a breakup of Microsoft, but a federal circuit court overruled the decision. It did, however, uphold the judgment that Microsoft held a monopoly with Windows.

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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