Microsoft said today it had reached a deal to settle a raft of private antitrust cases against the company, which sources said would cost the software firm more than a billion dollars.
The agreement with class action attorneys would require the company, which agreed to settle its separate three-year-old case with the Justice Department earlier this month, to provide free software and computers to more than 14,000 of the poorest U.S. schools over five years, sources close to the case said.
The deal would settle claims that Microsoft abused its monopoly over personal computer operating systems and overcharged millions of people for software.
The settlement proposal came from one of the lead plaintiffs' lawyers in the case, Mr Michael Hausfeld, who concluded that each of the 65 million computer buyers represented would receive as little as $10 in a settlement or court victory, one source said.
Estimates of the value of the private settlement ranged from $1.1 billion to as much as $1.7 billion, one source said. "It's going to get money to the people that need it the most," this source said.
However, sources said the deal could actually benefit Microsoft by providing a big public relations boost for the company and help promote its software in public schools, sources said.
Even more importantly, settlement of the private claims could increase pressure on the remaining state attorneys general who are still pursuing Microsoft in the government case, another source said.
The company reached a settlement designed to restore competition in the personal computer software market with the US Justice Department on November 2nd and nine of the 18 states involved in the case followed within days.
A federal appeals court in June upheld a lower court ruling that the company used illegal tactics to maintain its Windows operating system monopoly.