Microsoft To Face Class-Action Suit

A group of lawyers is reportedly planning to file a class-action lawsuit against Microsoft in a California court today, potentially opening the floodgates to financial damages far costlier than any fine levied by the U.S. government.

According to reports, three experienced class-action lawyers intend to file the suit in California Superior Court in San Francisco on behalf of at least 10 million consumers in the state who purchased Windows 95 or Windows 98 versions of the company’s operating system.

The suit is likely to trigger copycat lawsuits in jurisdictions across the country. Should the action prevail, Microsoft could be forced to pay out hundreds of millions or more in damages.

Action Could Trigger Settlement

That possible scenario is likely to make even the combative Microsoft think about a settlement with the government. Judge Thomas Penfield Jackson, the judge who declared Microsoft a monopoly in his findings of fact, appointed a respected Appeals Court judge on Friday to act as a mediator between the company and the government.

Microsoft is thought to have leaned toward a settlement in the past — before Jackson’s ruling two weeks ago – but continues to insist that it will be allowed to offer new features on Windows upgrades without any regulatory interference.

Class-Action Is Powerful Weapon

Microsoft need only to look at the tobacco industry to realize the power of the class action lawsuit in the United States. Of course, the company might well be satisfied with paying whopping damages and then going right back to business as usual.

Jackson’s finding of fact opened the doors for lawsuits against the Redmond, Washington-based software giant. He suggested that consumers paid high-end prices for Windows products as a result of Microsoft’s monopoly position.

The California lawyers say that the judge’s ruling bolsters their claim and that they will press forward with their case even if Microsoft decides to reach an out-of-court settlement with the mediator and the government.

The suit does not specify any dollar amounts, the reports say, but does ask for triple damages if a verdict goes against Microsoft. Triple damages are allowed in private antitrust cases.

Despite its legal woes of late, Microsoft is suffering little in the court of public opinion. Its shares rose nearly seven percent this morning in early trading in reaction to Judge Jackson’s decision late Friday to appoint a mediator.