Microsoft settles Calif. lawsuits for $1 bn

SEATTLE:  Microsoft Corp. has announced that it would pay up to $1.1 billion to settle class action lawsuits filed by California residents who claimed that the company had abused its market position and overcharged for software.

The settlement would be made to 13 million eligible California businesses and consumers in the form of vouchers to buy computers and software, including products made by Microsoft rivals, a lawyer for the plaintiffs said.

The California lawsuits were the largest of their kind pending against Microsoft,  which admitted no wrongdoing under the settlement.

The settlement came on the same day that a federal judge in Baltimore refused to dismiss antitrust charges brought against the company by competitor Sun Microsystems Inc. and two other software companies.

"We believe that this agreement makes a significant step forward to resolve our antitrust legal issues," Microsoft General Counsel Brad Smith told a conference call.

Final approval of the California settlement is still pending and subject to approval by a San Francisco court later this month.

California consumers and businesses who purchased Microsoft's Windows operating systems, or Excel or Word programs between Feb. 18, 1995, and Dec. 15, 2001 will be eligible to receive the vouchers under the settlement."Businesses

are going to have big claims," Furniss said.

Microsoft will also pay for plaintiff's legal fees, to be determined by the court, and for administration of the voucher program.

It has also agreed to mail and e-mail notifications to all of the California computers users in its database, publish newspaper ads to publicize the voucher program and set up a website to allow users to get claim forms, Furniss said. Two-thirds of any unclaimed settlement proceeds up to $1.1 billion will be donated to California's neediest public schools to be used for computer equipment and related services in a program to be administered by the state.

Microsoft would keep the remaining one third of any unclaimed portion. Shares in Microsoft closed 11 cents higher at $55.92 on Friday on the Nasdaq, a five-week high.

(C) Reuters Ltd