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Consumers get $180 million in Microsoft settlement, lawyers get $75 million

Microsoft has settled its long-running antitrust case in Iowa. The lawsuit, which was initially filed in 2000, claimed that Microsoft was involved in anticompetitive business practices which in turn resulted in higher prices for consumers.

The lead plaintiffs in the case, Des Moines lawyer Roxanne Conlin and Minneapolis lawyer Richard Hagstrom will receive $75 million in legal fee and expenses as a result of the settlement -- a record for the state of Iowa.

The $75 million in fees represent a bill rate of $575 an hour for each of the 150 lawyers, clerks and paralegals involved in the case. Over a seven year period, 117,000 hours were logged in relation to the case. The individual rate for Conlin and Hagstrom works out to $1,072 dollars per hour. The payout for the two lawyers also includes a 43 percent risk premium which was approved by a Polk County district judge.

While the lawyers will receive $75 million, Iowans will receive $179.95 million -- $330 million was originally requested. Microsoft will dish out $10, $16, $25 and $29 respectively for Word/Works/Home Essential, Windows/DOS, Excel and Office. Individual consumers can claim up to $200 without a proof of purchase, however, any amount exceeding $200 must be backed with supporting documentation.

Iowa consumers will receive their settlements in checks from Microsoft while businesses and government bodies will receive pay vouchers.

Some Iowans aren't happy with the settlements they are receiving in relation to the payout reserved for lawyer fees. "How in the name of all that is sacred can you even imagine that to be equitable?" inquired Parkersburg resident Betty Klingenbord. "I also do not like how this makes Iowa look. Where will these lawsuits end?"

The settlement covers Iowans who purchased Microsoft software between May 18, 1994 and June 30, 2006. Customers who wish to receive their reimbursements from Microsoft must do so before the December 14 deadline.



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RE: WTF?
By rdeegvainl on 9/4/2007 9:10:48 AM , Rating: 2
Opinions about Microsoft not included, If I owned all or a vast majority of a commodity that was needed, or percieved to be needed by the general public, like for example water, and sold it for 10 dollars a liter? are you saying that is right, just because of a free market economy?
I do think that microsoft is fairly pricing what they sell.


RE: WTF?
By TomZ on 9/4/2007 9:15:31 AM , Rating: 2
That's a bogus argument, since there always have been, and continue to be, other operating systems out there. For example, Linux is viable and is free. If you think that Windows is overpriced, you can just use Linux instead.


RE: WTF?
By rdeegvainl on 9/4/2007 9:26:58 AM , Rating: 2
That argument has nothing to do with oporating systems, read the first sentence. I find your argument to now be bogus. I'm just saying, Free Market doesn't just make whatever price ok, also the last sentence says that I don't have problem with the prices.


RE: WTF?
By Strunf on 9/4/2007 9:36:15 AM , Rating: 2
The OS is not a tool by itself, and if your tools aren’t available in Linux them you can’t change…

And the OS is overpriced, I mean after a few months the development of the OS is already paid, basically MS set the price based on how much pain they can inflect us with out making us switch.
As far as I’m concerned I could very well stay at win 3.1 provided I could play all the recent games in it... I wonder when will the EC or someone else now bang MS for its DX10-Vista crap deal, I just hope the game publishers don’t buy into this crap and may now support better the OpenGL standard (even if I doubt of it).


RE: WTF?
By mindless1 on 9/4/07, Rating: 0
RE: WTF?
By TomZ on 9/4/2007 12:29:51 PM , Rating: 2
quote:
Then let's just dissolve MS.

You're talking nonsense. Antitrust regulators have been carefully watching Microsoft for many years, and so far they have not observed any reason to even consider doing this.
quote:
Fact is, the only thing keeping their monopoly alive is that the public perceives it in their best interests to do so.

I disagree - you are ignoring the benefits and efficiency in having a single de-facto standard operating system. Applications writers can focus their limited development resources on a single platform, and the same for device manufacturers creating device drivers. Quality and choice would suffer terribly if there were 10 different popular OSs that needed to be supported.
quote:
If these other OS were viable alternatives for the public at large, MS would no longer exist today as the OS figurehead they are.

Other OSs are certainly viable today, considering that maybe around 10% of computers and a much higher percentage of servers run an OS different than Windows. But of course not running Windows, you'll be losing the benefit of the zillions of apps and devices that are supported. But this doesn't mean it's not viable.


RE: WTF?
By Munkles on 9/4/2007 12:41:55 PM , Rating: 2
Those servers aren't running the popular Ubuntu distro, or Mac OSX either.

Those servers wouldn't ever use an OS designed around server usage.


RE: WTF?
By TomZ on 9/4/2007 12:52:18 PM , Rating: 2
Sorry, I don't understand your point.


RE: WTF?
By Master Kenobi (blog) on 9/4/2007 9:15:57 AM , Rating: 2
It's not likely that would happen, another company would come around and destroy you selling water for 5 bux a liter. Free Market at work.


RE: WTF?
By rdeegvainl on 9/4/2007 9:22:46 AM , Rating: 2
I guess you missed the whole point of owning all or the vast majority.


RE: WTF?
By Master Kenobi (blog) on 9/4/2007 9:25:38 AM , Rating: 2
Vast majority because you have a worthwhile product. When you cease to have a worthwhile product, you start to lose. In the case of Microsoft they made good products, charged a reasonable price, and continue to do so. Thus they maintain a rediculous 93% marketshare. If they started charging insane prices you would see that number slide and fast.


RE: WTF?
By rdeegvainl on 9/4/2007 9:35:32 AM , Rating: 1
You also missed the part of it saying not about microsoft.


RE: WTF?
By Verran on 9/4/2007 10:40:38 AM , Rating: 2
The topic of this article is Microsoft. Generally, people assume that comments within a specific article will be of the same subject matter as the article.

A corporation that somehow manages to take control of the entire planet's water supply (70%+ of the Earth's surface) in order to price-gouge consumers makes for a neat story, but seems a bit off-track under this article.


RE: WTF?
By rdeegvainl on 9/4/2007 10:46:10 AM , Rating: 2
That is why you shouldn't assume, and should read the first sentence of a post you reply to. (along with the rest)
Though the post was to a comment already made about Free market. That is why I made it a reply and not a first post.


RE: WTF?
By Oregonian2 on 9/4/2007 2:03:25 PM , Rating: 3
It wouldn't be a matter of having 70% of the world's supply. It would be a matter of supplying 70% of the water. Very different thing. In the case of Microsoft, they don't own all the 1's and 0's, there is nothing stopping alternatives to compete should the market show a need for a competitive alternative at a lower price point. It's the reasonable price that keeps others from sprouting and flourishing.


RE: WTF?
By Munkles on 9/4/2007 9:24:36 AM , Rating: 3
There are many flaws in your logic sir.

First, MS Office is not an essential component of life. Second, MS has in no way prevented anyone from producing a competitive product, and others have sprung up (open office anyone?). Third, there ARE water companies that charge that much or at least shockingly similar amounts for water. Finally we come tothe final reason your argument is flawed. The idea of a free market economy is that you can sell your goods and services at ANY rate that the market can and will bare.

In the end each consumer gets a check that will cover a couple lattes at Starbucks at a sick cost to MS. When all they have done is require retailers to price their product at its worth.

American legal system at its finest. Little wonder lawyers are always looked at as crooks, thieves, and leaches. IMHO this case should have been thrown out before it ever began very few people will ever bother to mail in for the rebate and an extremely select few will have the proof of sale.


RE: WTF?
By rdeegvainl on 9/4/2007 9:33:47 AM , Rating: 2
The first flaw in your logic is that the coment was in anyway about microsoft.
So your first two points are moot.
Third point, do these companies hold the vast majority of a product? or are they sold as a LUXURY, or Social class kind of water? If it is the first, then that is wrong.
Last point, as the given situation in my argument was that someone with the control over a needed supply is gouging the price, then free market doesn't even exist, just a monopoly, under the guise of calling itself free market.


RE: WTF?
By masher2 (blog) on 9/4/2007 10:03:36 AM , Rating: 2
> "someone with the control over a needed supply is gouging the price..."

Your argument breaks down because the only commodities that are truly needed are food, water, and air-- none of which are under the control of a single source.


RE: WTF?
By rdeegvainl on 9/4/2007 10:43:35 AM , Rating: 1
good point
Counter point,
Cure for a deadly virus.


RE: WTF?
By Munkles on 9/4/2007 10:21:41 AM , Rating: 2
The first two points are accurate as you are comparing MS to a "water" company that is price gouging an essential component to life.

Those companies that charge so much for their water ARE indeed social or luxury branded water vendors but thats besides the point you, you simply said that what MS had done was the equivalent. It is ill advised to compare and contrast two sources which are vastly different and have no real correlation.

A monopoly is by definition: exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly.

Microsoft in no way has a monopoly as competitors do exist, and the only reason they do not gain traction is because by comparison they are a substandard package.

Guise of a free market? Now you just sound nuts, whatever dream world you live in America IS a free market economy; Iowa IS a free market. Further no Microsoft product is NEEDED. There is not one of their products listed in the lawsuit that does not have a proper alternative, and one that is generally free. The ones that aren't, usually land at the same price-point as the Microsoft product.


RE: WTF?
By rdeegvainl on 9/4/2007 10:41:29 AM , Rating: 2
No I am not comparing microsoft to a water company.
and the rest of your entire argument rests on that.
I will redirect you to the first statement of my original post. Read it. Make sure you understand that I am in no way talking about Microsoft. If you want to argue with things I've never said, by all means do, do so with someone else.


RE: WTF?
By Master Kenobi (blog) on 9/4/2007 11:04:22 AM , Rating: 2
Your water company would be beaten into the ground by competing water companies. Unless you cut a deal with all of the other water companies, in which case you would be guilty of price fixing and would land yourself in jail.

I fail to see the validity of your water company. It wouldn't last very long unless your marketing department somehow spun a PR campaign making people think it was liquid gold. In which case, gouge at will.


RE: WTF?
By Master Kenobi (blog) on 9/4/2007 11:06:36 AM , Rating: 2
Oh and just an FYI, your fictional water company has nothing in common with the article at hand and I will go out on a limb and say it was completely off base to even post such an example. The topic is on a software company, your post deals with a fictional water company that could never exist in a Free Market.


RE: WTF?
By rdeegvainl on 9/4/2007 11:23:25 AM , Rating: 2
Wow i guess you still failed to see the part where there is little to no supply for these competitors to compete with, and yes that would land someone in jail. Which was my point the hole time, that sometimes the free market shouldn't have free reign over everything and needs to be regulated. It was in regards to you comment that it is a free market and dictation by lawyers and pissed off consumers. But what about when they are right? I am not saying they are in this case, but there still have to be limits.
I will end off on the same note my original reply did,
I do not believe Microsoft products are overpriced.


RE: WTF?
By Master Kenobi (blog) on 9/4/2007 11:26:48 AM , Rating: 2
quote:
Opinions about Microsoft not included

Yes, but we are talking about your water company now werent we?


RE: WTF?
By Munkles on 9/4/2007 11:05:13 AM , Rating: 2
My apologies rdeegvainl, I did not see the last line in your post even though I read it half a dozen times previously.

quote:
I do think that Microsoft is fairly pricing what they sell.


I would wager I wasn't the only one who didn't catch that line either.

Free market how ever doesn't necessitate right or wrong. MS however is not a monopoly, and as a general rule any time they attempt to be competitive it gets labeled an anti-competitive business practice so in general I get quite riled up when I see people railing on MS with no justification other than that they either dont know the intended use of a MS application, or dont know how to use it themselves and then just get pissed off at the only thing they can find I.E. that MS is a freaking huge and extremely profitable company.

Again i'm sorry for attacking you after I myself misread your post and its intentions.


RE: WTF?
By rdeegvainl on 9/4/2007 11:08:57 AM , Rating: 2
I also agree with you.
"Free market how ever doesn't necessitate right or wrong."
I think though it is a great tool to inspire competition and growth, that it can be unfairly abused and needs some regulation.
And thank you for actually rereading my comment, I'm glad I have replay value LOL.


RE: WTF?
By Munkles on 9/4/2007 11:12:41 AM , Rating: 3
I will admit, I had a nice long rebuttal all typed out and then I previewed to check for typo's and realized what you WERE saying as opposed to what I had understood, and I felt like a total douche.

Nice to know not everyone on the internet is just gunning for a fight, some are just looking for intelligent discourse.


RE: WTF?
By kmmatney on 9/4/2007 2:33:11 PM , Rating: 2
If you want cheap office software, you can buy MS Works.

http://www.newegg.com/Product/Product.aspx?Item=N8...

It's only $9.99! OPenOffice is even chepaer, of course. You can fuly share Word and Excel documents with either app.


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