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Madison, Wis. -
A class-action lawsuit on behalf of Wisconsin consumers against Microsoft can proceed under the state's antitrust laws, as a result of last week's state Supreme Court ruling
The suit, led by Milwaukee resident Gene Olstad, seeks a settlement fund for all Wisconsin consumers for money lost through monopolistic practices. The suit's major contention is that Wisconsin consumers have paid inflated prices for Microsoft products, especially the Windows operating system, as a result of anticompetitive practices by the company.
The lawsuit was filed in 2002 shortly after Microsoft's settlement with the federal government following its 2000 conviction for violating antitrust law. While legal standing to file suit under federal law is confined to first buyers such as computer manufacturers, Wisconsin law allows indirect purchasers like end users to file suit as well.
The court's 5-0 ruling on July 13 struck lower court rulings holding that Microsoft, which is based in the state of Washington, was not subject to Wisconsin antitrust law. The standing of Wisconsin residents to sue Microsoft, even though the vast majority of illegal activity took place outside the state, had been a major stumbling block to the litigation process.
"They operate interstate but the injuries caused by their monopoly injured citizens of Wisconsin and consumers in Wisconsin," said John Maloney, lead attorney for the plaintiffs. "And therefore, based upon the Supreme Court's ruling, we have standing to sue for those injuries here in Wisconsin despite the fact that the activities occurred outside of the state. The impact was felt by the consumers here in Wisconsin."
The decision does not rule on the merits of the case. The case will now be remanded back to the lower courts, where litigation can proceed.
"Generally, what happens is once you get through some of the procedural hurdles, the parties end up settling," explained Peter Carstensen, a law professor at UW-Madison who authored a friend-of-the-court brief in the case on behalf of the plaintiffs.
Though the total amount of such a settlement has not yet been determined and would likely be a product of future negotiations, Carstensen noted that neighboring Minnesota, which is in many ways comparable to Wisconsin in attributes that would determine such a figure, received a settlement of roughly $600 million.
Microsoft spokesperson Rachel Wayne said the company is confident it can win on the merits of its case.