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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: Hrm....
By Master Kenobi (blog) on 9/4/2007 11:19:13 AM , Rating: 2
Why should my company be responsible for supporting retailers that push an old version of my product that I am trying to replace with a newer and better version of my product?

You don't see Best Buy pushing last years TV's, or slow ass computers, or Casette Players now do ya? No thats right, they were replaced with New TV's, New Fast Computers, and CD/High-Def Players.

The answer is simple. Best Buy, etc... carry HP, Sony, Toshiba, Acer, etc... Those companies are pushing their LATEST computers to the Retailers. Those PC Vendors are selling only Microsoft based machines. Microsoft has stated XP is no longer being sold to OEM's and the OEM's have responded accordingly and switched to Vista. (Just like what happened with 98SE/ME to XP 7 years ago OMG DEJA VU!!!)

In short... Deal with it.


RE: Hrm....
By Screwballl on 9/4/2007 12:33:58 PM , Rating: 1
So if you buying a car you want brand new from the dealer and you want a manual stick shift but they only carry it in automatic, should you be forced to buy it with the automatic? People should have the choice to buy what they feel comfortable with, not be forced to get the "only" thing available. Sure the stick shift may be older technology but I still have a choice.

In my case I choose dual boot XP and Linux (FC7) and the stick shift vehicles.


RE: Hrm....
By TomZ on 9/4/2007 12:51:29 PM , Rating: 2
No, you have no right to force a business to offer you exactly the options you want. If a dealership or manufacturer doesn't offer the options you want, you always have to choice to take your business elsewhere. That is how a free, open market works.

If you don't understand this pretty simple concept, think about it this way. Suppose you owned the dealership. Don't you think you'd want the "freedom" and the "choice" to decide what kinds of cars and options to offer to your customers, since you owned the business? Don't you think you should have that right? How would you like it if you were forced to carry options that you didn't want to, expecially if those options caused you to make less money than you should, or worse, lose money?


RE: Hrm....
By Blight AC on 9/4/2007 1:20:50 PM , Rating: 2
Well, comparing it to Air Conditioning in a car would be more appropriate. Try to buy a new car without AC, yet, AC is still listed as an "option". Whether I use it or not, I still have to pay for it.

That's why Microsoft is on the losing side of this lawsuit and has to pay back Iowa the millions from the lawsuit. Microsoft coerced OEM's to provide MS Office, and thereby forced customers to buy MS Office whether they were going to use it or not.


RE: Hrm....
By acer905 on 9/4/2007 1:45:09 PM , Rating: 2
There is this nifty thing you can do. Customize, and special order. Then, you get the options you want, and you don't get the ones you don't want. Amazing concept, don't you think?


RE: Hrm....
By Blight AC on 9/4/2007 1:59:28 PM , Rating: 2
Meh.. takes too long till I get my car.. I want it now! :D Admittedly, a part of it is the consumers fault, because they did pay for this agreed upon price.

However, sometimes, the consumer feels that is their only option, for instance, the dealer told me flat out, that I couldn't get a car without the "optional" A/C.


RE: Hrm....
By TomZ on 9/4/2007 2:20:22 PM , Rating: 2
If you want to change the system, you have to work within the system. By buying a car from another company that offers a non-A/C variant, or by special-ordering a car without A/C, then you are sending your vote to the market to have that "non-option" more readily available. If a significant number of like-minded customers do the same thing, then change will happen.

From a practical standpoint, at least in the U.S., I think most people believe that AC is a worthwhile investment, which is why most dealerships order most of thier cars with it. I live in Michigan, and I would never have a car without it, and I can't imagine the climate in any of the lower 48 is such that AC wouldn't add a lot of value, not to mention resale value.


RE: Hrm....
By Blight AC on 9/6/2007 1:56:15 PM , Rating: 2
Or, you know, I could just sue them later on, in a State vs Vehicle Manufacture/Dealer case... even though I've been using the A/C anyhow. Isn't that the American way. :P


RE: Hrm....
By Spivonious on 9/4/2007 1:30:43 PM , Rating: 2
Let me fix your analogy.

You read in the newspaper that GM has stopped making parts for their manual transmissions (support for XP). Because of this, GM cars (new computers) now only come with automatic transmissions (Vista). You go to the dealer and find only automatic cars (Vista-loaded computers).

Can I go to the dealer and buy a new car that has a crank-start? No, that went the way of the dodo when key-ignitions came around. Same thing here: MS doesn't want to waste time and money supporting an old version of their OS so they stop selling it.


RE: Hrm....
By acer905 on 9/4/2007 1:42:25 PM , Rating: 2
AS Henry Ford once said "Any customer can have a car painted any color that he wants so long as it is black"


RE: Hrm....
By Verran on 9/4/2007 2:00:04 PM , Rating: 2
This manual/automatic analogy is weak, at best. If they don't offer a manual, don't buy a car. No one is forcing you to do anything. Go to another dealer, or buy used.

Now, dropping all the lame, shallow analogies...

Companies offer the products that they want. Just because you've decided that you want something doesn't mean that they have to give it to you. Companies make new products and discontinue old ones. This happens every single day. A lot of times, users perceive the "new" product as worse, but this does not give them the right to demand that the old one be reinstated.

There are incredibly few products that anyone can truly say they "must have". For everything else, vote with your wallet. If you buy it, you do so willingly. No one is forcing you to do anything.


RE: Hrm....
By Screwballl on 9/4/2007 3:44:40 PM , Rating: 1
This is a PERFECT analogy for the topic.
Since I can't buy my manual transmission, I have to get used to my failing current car until it dies at which point I am forced to buy the automatic. This is MS's idea of the OS market. I could keep buying used cars with manual transmissions but it will get to a point when it is no longer available and I will be forced to use the automatic. Its not like I can buy this new car and put in my own manual transmission (much like most new OEM computers are locked into Vista and it will not run any other OS including XP). So with this in mind, no matter which dealer I went to looking for new cars, they will all only sell the automatic transmission.
This is not a "FREE" market, this is forced coercion into a product I do not want. After so long people forget of the great freedom they had with XP and become content with their current system. Luckily with a PC we do have the option of Linux based distros which will provide us with 95% functionality with the other 5% being games and specific other tasks that are MS-only.

This is NOT a proper and "free" market.


RE: Hrm....
By acer905 on 9/4/2007 3:56:18 PM , Rating: 2
It would be a true free market if the government would keep its hands out of the business world. Every time a new law comes out, people lose options. Every time there is a lawsuit, the company hit with it will do something to make it up. Breaking up a company does not work. AT&T is stronger than ever before.

And, i would like to know how it is possible to lock a computer into a certain operating system.

Oh, and here's one for ya. Build your own computer. its really not that hard. And most times you can get the parts cheaper that way too. And guess what, you get to pick and chose what options you want. Including the OS. GASP!!!!


RE: Hrm....
By Screwballl on 9/4/2007 4:46:21 PM , Rating: 2
As a computer tech, I have been building my own since the 486 days...


RE: Hrm....
By Screwballl on 9/4/2007 4:52:29 PM , Rating: 2
Try buying a Lenovo (IBM), HP, Compaq or almost any other OEM computer nowadays... they have locked their systems to only work with Vista. I have returned at least 3 from each company (Lenovo, HP, Compaq and Acer) to the store where it was bought because of this. A majority of OEM computers are locked into Vista via some hardware or hidden software lock that cannot be bypassed by the end user. No XP, no Linux, when you try to install them it says "cannot find hard drive" regardless of if it is a PATA or SATA hard drive.

This is why I build my own, use my old 2002 version of XP on a small 20GB partition and everything else is partitioned for Linux (currently FedoraCore7)


RE: Hrm....
By TomZ on 9/4/2007 6:14:42 PM , Rating: 2
How have they "locked their systems to only work with Vista"? How is that physically even possible?

Please tell us about Linux, or something else you actually know something about. You obviously know nothing about Vista.


RE: Hrm....
By Verran on 9/4/2007 4:17:43 PM , Rating: 2
OK, so follow your "PERFECT" analogy through. What's the solution? Do we force the car company to make the car the way YOU want it? And what if everyone wants something different? Do they have to appease everyone?

If I go to my local Ford dealership, slam my fist on the desk at the service department and say "I want a carburated engine in my Focus!", should they have to comply? I assert that it's easier to maintain for the end user, and therefore I'm enraged at their lack of carburated engine options. How dare they force me to buy something I don't want?!

No. That's dumb. They sell what they want. You can't force them to offer a product they don't want to offer. The fact that Best Buy won't sell me a LaserDisc player does not make it anti-"free market".

Perhaps you're mistaking the phrases "free market" and "market where companies do whatever -I- want always"...


RE: Hrm....
By TomZ on 9/4/2007 4:24:24 PM , Rating: 2
Wow, Windows XP = freedom - now I think I've heard it all.

Damn companies always wanting to develop new improved stuff! They should stop developing, because XP is the most ultimate operating system ever written. NOT.

Get real, and get over it. Change happens, you can't stop it, you have to adapt to it.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA











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