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MS moves to dismiss class action suits

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CIOL Bureau
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SEATTLE: Encouraged by a string of recent legal victories, software giant

Microsoft Corp. on Wednesday moved to dismiss a raft of class action lawsuits

alleging the software giant illegally overcharged for its Windows computer

operating system.

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The Redmond-based company said it had filed with the US District Court in

Baltimore, Md., to dismiss 37 of the 62 cases that were consolidated in the

court in April to make it easier to process the suits.

"These things should be dismissed right out of hand," Microsoft

spokesman Jim Cullinan said.

More than 100 class action suits have been filed against Microsoft across the

nation in the wake of a federal judge's ruling that the software company broke

antitrust law by using its monopoly power in Windows to harm rivals. The company

is appealing the judge's order that it be broken into two to prevent further

antitrust violations.

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In its filing, Microsoft cited a 1977 ruling called "Illinois

Brick" in which the state of Illinois alleged that construction supply firm

Illinois Brick overcharged for concrete blocks used in state building projects.

The decision said Illinois Brick could not be held liable for overcharging

because it actually sold the concrete blocks to contracting companies rather

than directly to the state.

Similar class action cases against Microsoft alleging overcharging of Windows

have been dismissed on the Illinois Brick precedent by courts in Hawaii, Iowa,

Kentucky, Nevada and Oregon in recent months.

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"There is one principle of federal antitrust law that has long been

crystal clear and uniformly applied: indirect purchasers–those who did not pay

the alleged antitrust violator but instead paid another party in the chain of

distribution–may not bring a claim for damages," the company said in its

filing.

Most copies of Windows are sold through bulk licenses to computer

manufacturers, who bundle the software into their machines. Retail copies are

also sold en masse to retailers, who then sell to consumers.

Microsoft has at times directly sold Windows through an online store, but

maintains that such sales are only a tiny fraction of the total.

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The other 25 cases, all based on state law that did allow claims by indirect

purchasers, would be fought on other grounds, Cullinan said, adding that

Microsoft's products and pricing strategy have been good for consumers.

"There's not a bunch of angry consumers jumping up and down ... these

are a bunch of plaintiffs' attorneys trying to go after successful

companies," Cullinan said.

(C) Reuters Limited 2000.

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