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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: Lol
By TomZ on 9/4/2007 12:39:40 PM , Rating: 2
I think it is certainly true that Microsoft has some pricing control, but not complete control. Consider, for example, a hypothetical situation where Microsoft decided to raise the cost of Windows to $1000/machine. What would be the effect of that? That's easy - Linux and OSX use would skyrocket overnight. If you agree about this, then it should be clear that Microsoft does not have a pure monopoly in the same sense that AT&T used to have with phone service in the U.S.

Next, I would also remind you that it is not illegal to have a monopoly. It is only illegal if you abuse a monopoly in any one of a number of ways. Actually, monopolies are a good thing in some cases. For example, in most parts of the U.S., utilities are granted monopolies for electric, water, gas, cable TV, and local phone service. These monopolies are thought by many to be beneficial (though I'm not personally convinced of this).

I would also argue that Microsoft having a near-monopoly in operating systems is a good thing, since it allows nearly all software development resources to be applied to a single platform. The situation would be far worse if there were a number of popular OSs that each needed to be supported. Choice and quality would suffer.

RE: Lol
By Master Kenobi (blog) on 9/4/2007 1:41:40 PM , Rating: 1
If we had multiple OSes to support we would end up with something akin to the Console Wars. Games only work on one console, not the others. Gotta buy the right version (Disk) for your particular console, and there are variations between them because of the limitations/advantages of the platforms themselves.....

Yea forget that shit, Console competition is annoying as hell already, I prefer to keep the PC market similar.

RE: Lol
By TomZ on 9/4/2007 2:26:09 PM , Rating: 2
Exactly right, the situation is the same. In the console world, you have a choice of hardware, which led to splintering of the software, which makes it harder to run any software of your choice.

With the PC market, all the hardware is converged to a common platform (very little choice) and a common OS (very little choice), but this yields a lot of choice where it is important - the application software. After all, the reason for having a computer is for running application software. The operating system and hardware are more of a "don't care" as long as they support the requirements of the applications you want to run. So with the near-monopoly, you have the choice where it is most useful to have it. That is a good situation.

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