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Micro$oft besieged by righteous lawyers

Consumer "advocates" smell green ink in the water

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Judge Thomas Jackson's unfavourable finding of fact in the MS trial has emboldened a Lilliputian army of lawyers to file suit on behalf of gulled consumers across the USA. State and federal lawsuits have been filed so far in California, New York, Alabama and Louisiana, and more are expected. One such class-action lawsuit, filed with the California state court in San Francisco (where else?), alleges that overpriced Microsoft products caused consumers to pay too much for PCs pre-loaded with Windows. Consumers were overcharged approximately US $40, the class reckons. Only seventeen states and the District of Columbia permit such suits by indirect purchasers. The class will bear the burden of proof in demonstrating that Windows-equipped desktop prices are inflated. The Register wonders how they are going to manage it. So few PCs come outfitted with other operating systems that there is virtually no basis for comparison. The lawyers may be salivating, but death by a thousand cuts is by no means assured. Judge Jackson's current finding offers little foundation for specific legal action, though his final ruling may well do so if the DoJ and Microsoft fail to reach a settlement in the mean time. Clearly this gives Microsoft an added motivation to settle; and if the lawsuits mount as they are expected to do, the pressure will increase and so strengthen DoJ's hand in the negotiations. As for consumers, they ought not to expect a great deal. Class-action lawsuits generally go a long way towards enriching the lawyers who pursue them, which explains the popularity of such selfless acts of public service; but when the haul is tallied and fees are calculated, the payout to the class is often comically small. We might expect a few tens of millions to show up in the advocates' coffers, and perhaps a few discount coupons good on purchases of Microsoft products for the aggrieved class. Big Blue successfully fended off similar opportunistic lawsuits during its lengthy antitrust battle with Uncle Sam, eventually paying out something like two percent on the total claims brought to bear. With that in mind, no one is hanging crepe for the Redmond giant just yet. A cynical Wall Street laughed off the lawsuits yesterday, as Microsoft shares closed up $4.19, for a gain of nearly five percent. So there. ®

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