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Iowa Antitrust Case Costs Microsoft $255M

Journal written by twitter (104583) and posted by kdawson on Mon Sep 03, 2007 07:04 AM
from the cheap-at-half-the-price dept.
Government The Courts Microsoft News
The judge in charge has approved the payout for the case, which was settled seven months ago. Iowa citizens will get up to $179 million in refunds and the attorneys will get $75 million, $8 million of which covers expenses. There's another $1 million in there for legal aid. Individual consumers pocket very little: they can file for $16 for each copy of Windows or MS-DOS purchased over a 12-year period, and $29 for Office. Such a payout would serve as a deterrent only if all 50 states had sued and won similar amounts. Alone it's a slap on the wrist.
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[+] Microsoft Settles Iowa Antitrust Case 198 comments
ForestRangerBob writes "Comes v. Microsoft is over after Microsoft agreed to a settlement. The class action lawsuit alleged that Iowa consumers had been overcharged for Microsoft products for a decade owing to Microsoft's monopoly of the market. Predictably, the lawyers are about to get a big payday and 'the software giant will certainly be on the hook for millions of dollars, some of which may end up helping Iowa school kids. Average consumers will probably end up with a few bucks or a coupon for a free operating system upgrade, but the real winners will no doubt be the lawyers — the team prosecuting the case has already earned $60 million in legal fees from a 2004 case in Minnesota that charged Microsoft with similar offenses.'"
Journal: Iowa Anti-Trust Case Costs Microsoft 256 Million Dollars. by twitter (104583)
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Iowa Antitrust Case Costs Microsoft $255M 50 Comments More /

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  • MS gets stung for millions, yeah! But lawyers get millions, boo! But MS gets stung for millions, yeah! But lawyers get millions, boo! But... head explodes.

    • Re: (Score:3, Insightful)

      by Anonymous Coward
      The sound of MS getting stung for millions is strangely similar to the sound of Gates slapping his wallet on the desk and asking "you got change? Smallest bill I got is a billion"

        • What retard moded you up? Millions of Americans own shares in MSFT. Investments include retirement funds, college savings, etc. Gates is a minority shareholder in the company, not even close to being the majority owner.

          So they nicked MS for what, half a day's pay? The shareholders won't notice the mebbe 5 cents off their divident check.

      • I think you will find M$ has already raised the prices as high as they can with out killing demand. What strange land do you come from, surely not fantasy marketing land. Prices are set by supply and demand, companies will charge the maximum price they can with so long as they do not cripple demand and reduce revenue.

        Companies especially companies like M$ do not and never will set prices based upon generosity.

        So every cost, every civil suit, every legal punishment, we can stick M$ with, hurts their prof

  • Alone it's a slap on the wrist. (Score:4, Informative)

    by smchris (464899) on Monday September 03 2007, @07:11AM (#20450627)
    Who says it's "alone"? Here in Minnesota in '04 MS bought me a cheap printer, refurb Epson scanner, and three LinuxStore keyboards.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      all cheap throwaway consumables.

    • I got $239 CASH from the Minnesota settlement.

      -Rick
      • Correction...

        Minnesota Settlement

        by Rick Richardson (87058) on Wednesday February 14, @05:45PM (#18017518)

        02/13/2006 FUNDS RECEIVED *type: *DEPOSIT $251.00

        $251.00 is serious money from Microsoft Corp, NOT "Average consumers will probably end up with a few bucks or a coupon".
          • If all 5m residents of his state got $251, that's a total of $1,255,000,000 which is enough to hurt ANY company. "But Micro$oft has liek $9b in cash!" so? That's still a LOT of money. That's almost as much as they lose on their X-Box devision every year (zing).

            And a payout like that would encourage other states to follow with their own lawsuits. "Remember that $251 check you got from Microsoft? I was the guy who went after the big bad company. Vote for me!"
  • Since when is a quarter of a billion dollars a slap on the wrist? Sure, it's not earth-shattering, but come on, man!

    • Re:A Slap on the Wrist? (Score:5, Insightful)

      by Swampash (1131503) on Monday September 03 2007, @07:34AM (#20450767)
      Since when is a quarter of a billion dollars a slap on the wrist?

      When it's imposed upon an entity that makes 13 billion dollars every three months and records that against offshore subsidiaries that pay no tax?

      Just a thought.
    • "Since when is a quarter of a billion dollars a slap on the wrist? Sure, it's not earth-shattering, but come on, man!"

      Slashdot readers are millionaires who read Slashdot while sitting on the decks of their yachts or flying in their personal jets.

      The point people are making is that the fine is far too small to encourage Microsoft to stop being adversarial toward its customers. Anyhow, I'm guessing that Bill Gates would rather be poor than be good towards customers. Sometimes the adversarial behavior se
  • hmm.

    if they wanted to hurt MS then they should of added a zero to that sum.

    or should it to be 2 zeros?

      • Re: (Score:3, Insightful)

        by apodyopsis (1048476)

        ..and people buy it of their own free will

        sorry? come again?

        have you actually tried to buy a new PC without MS software on it? I have. It has been more or less impossible for many years, it is only comparatively recently that OEMs have begun to offer free alternatives. I am MS free at home. I do not buy MS of my own free will yet I find it crammed down my throat with every PC purchase. Of my own free will indeed.....hah!

      • What it comes down to is that 99.999999999999999999999% of people who want to "hurt" MS or whine about them being "evil" are just people who are jealous that they don't have that kind of money.

        As someone who has worked in the tech industry since the late 1980s, I have seen Microsoft go from one of the great enablers of the computer age to one of the anchor stones. It was never a particularly nice company, but there was a time when a lot of us cheered that Microsoft was telling IBM to sod off, and was encou

  • and here's the math... (Score:5, Funny)

    by martin-boundary (547041) on Monday September 03 2007, @07:28AM (#20450721)
    Cost of 17.9 million x $10 dollar rebate vouchers on future Microsoft software purchases for Iowa citizens: $179 million

    Cost of 7.5 million x $10 dollar rebate vouchers for a team of attorneys: $75 million

    Look on the senior partner's face when 25 trailer trucks full of printed rebate vouchers enters the parking lot: priceless.

    There are some jokes money can't buy. For everything else, there's Slashdot.

  • $75 million! (Score:5, Interesting)

    by drspliff (652992) <{harry.roberts} {at} {midnight-labs.org}> on Monday September 03 2007, @07:28AM (#20450723) Homepage
    And the attorneys will get $75 million, $8 million of which covers expenses.

    I call bullshit, why are they getting this when their expenses are significantly lower and it isn't part of the money given out to everybody who bought Windows?

    I'd be seriously pissed if I found out lawyers were skimming massive amounts from public settlements on behalf of my state or county. Where's it going eh?

    • why are they getting this when their expenses are significantly lower
      How do you know? Been going through their statements? [slashdot.org]

      I'm not a fan of lawyers in general, but it's not as if Billy G would have ponied up the dosh without them, is it? There'd have been no settlement to start with and the people would have got nothing.

      • How do you know? Been going through their statements?
        Cause it says their expenses were about $8 million, so receiving nearly ten times what their expenses were seems excessive. Then consider that the people who were actually harmed in this case are only getting just over twice what the lawyers are getting. That also seems very unbalanced. Lawyers should be getting a percentage, that is certain, but I don't see why that percentage should be nearly 30% of the award.
    • "I'd be seriously pissed if I found out lawyers were skimming massive amounts from public settlements on behalf of my state or county. Where's it going eh?"

      IT-infrastructure to manage the case. In other words:

      * Sharpoint servers
      * Office 2007
      * Upgrades to Windows Vista Ultimate
      * New hardware for above mentioned software

    • Re:$75 million! (Score:4, Interesting)

      by Manchot (847225) on Monday September 03 2007, @08:47AM (#20451295)
      I call bullshit, why are they getting this when their expenses are significantly lower and it isn't part of the money given out to everybody who bought Windows?

      I know that it's popular on Slashdot to vent against lawyers who do class action suits, but come on. You said it yourself: the law firm incurred $8 million in expenses to see this thing through. Yes, they ended up earning $75 million (because they won), but how much would they have gotten if they lost? Nothing; in fact, should they have lost, the judge could've ordered them to pay Microsoft's fees (which are likely even higher). Eight million is quite a large amount of money to gamble, especially considering that the lawyer in this case has her own law firm [roxanneconlin.com], and probably paid those expenses out-of-pocket. All told, the market's decided that a 30% contingency is fair for such a high risk, and I'm inclined to agree.

      Moreover, I'd like to know how you'd "fix" the system as it stands. Obviously, you cannot ban class actions or limit the damages, because in many ways they're the only recourse that a bunch of people screwed by a corporation have, without the government (the largest class of them all) stepping in. You cannot place any limits on class action lawyers' pricing structures, either, because that'll have the effect of decreasing the number of class actions we have. No lawyer is going to take such an expensive case on a 10% contingency.

      The only way that I can see is to have the government step in more often when a company has screwed people. Unfortunately, the DoJ hasn't really been prosecuting misbehaving corporations since early 2001: I wonder why?
      • Did you know that for only $1.25 million you can feed a family of lawyers for a year? Please help us feed the lawyers. Give what you can.
      • The lawyers were retained by Iowa state government. That means that if they incurred $8 million in costs and lost, Iowa would have had to pay them. At least, that's how it happens in my own la-la-fairy land, where people get paid to perform a service to the best of their ability, even if the end-result does not correlate to my desired outcome. I suppose it's possible the laywer said "You know, I'll do this, but if we get a settlement I want 25%", but it does reek a little.
      • Eight million in terms of what a normal person might charge, or eight million in terms of what bottom-feeding lawyers have been known to charge?

        I know you're aware of the problem - that an injured class gets proportionally less of an award than the lawyers. But seriously - do you think class action suits would dry up if lawyers were capped at 10% (or even less)?

    • Hmm... I would have thought a tech-savvy crowd would understand the relationship of expenses to total cost. When you write a new software application, your expenses are things like compiler licenses, printer paper, etc.... The true cost of development is in paying your software developers. The same is true of attorneys. In this case, the $8m does not include any portion of any attorney's pay. It does include court costs, stenographers (for depositions), photocopying, etc..., which are a tiny portion o

      • 75,000,000 / 117,000 = $641/hour.

        That's really not that bad when you figure that's gotta cover EVERYTHING.

      • When you write a new software application, your expenses are things like compiler licenses, printer paper, etc.... The true cost of development is in paying your software developers.

        If your staff aren't an expense, what are they? Liabilities?;) ... I would have assumed that the 8 million expense covered everyone's time, but as Twitter said getting a 10x ROI on this kind of thing probably isn't that terrible.

        • You're confusing the items on an attorney's bill with accounting terminology. Except for contingency fee scenarios, attorneys are generally paid on a "time + expense" basis. The time part (the fee) is whatever the attorney's hourly rate is (x the number of hours), and the expenses are for the things I mentioned.

          You would be amazed at how piddly little things can add up on a big case like this -- the discovery costs are probably the largest part of the $8M.

  • Thank god I bought 14,572 copies of windows in the past 12 years.
    14,572x16=233,152

    4.)Profit!!

  • a deterrent only if all 50 states had sued and won

    Or just maybe, if M$ lost a FEDERAL antitrust case? Nah, THAT could never happen...

  • ... and hang it high for everyone to see as a reminder that lawyers
    always win more.

    How many of the residents do you suppose will actually cash in?
    Are you required to be put on a spam list to collect? Probably.
    For the $16 dollars you get, what is being gotten from you?
    Could have windows been sold for $16 dollars less to begin with?

    Microsoft is not a bottomless pit of money. With all the lawsuits
    and judgements against them It'd be interesting to see where there
    books really are. At least to know how much more

    • Microsoft is not a bottomless pit of money. With all the lawsuits
      and judgements against them It'd be interesting to see where there
      books really are. At least to know how much more they can sacrifice
      or risk in future uncompetitive wrong doings.

      They may not be bottomless, but they might as well be. These itty-bitty rulings are little more than petty cash. I have little doubt that when such cases rear their ugly heads, the Redmondonian accountants put aside large chunks of cash to pay for them.

    • "How many of the residents do you suppose will actually cash in?
      Are you required to be put on a spam list to collect? Probably.
      For the $16 dollars you get, what is being gotten from you?
      Could have windows been sold for $16 dollars less to begin with?"

      If the California case is any indication, very few will bother to "cash in". But the reason is that the common fold don't give a damn about this case!! In the past few years, I've received class-action settlement notices for Dell (some laptop issue) and Apple
  • A lot of people are scoffing at the legal payout: 75m (67m effectively, without expenses). While it's incredibly high out of context, it actually makes sense over the course of a 6 year ordeal. I don't know how they structured the award settlement with the firm, but I'll simply go with the idea that it was purely labour-based.

    Assume that the average legal fee at the firm is about USD 500 per hour. 67m buys 134k hours which equates to roughly 15.29 consecutive years of labour for one person that works 24 hou
  • Fundamental problem with the monopoly abuse of MSFT is that the customers are not demanding better interoperability. The concept of interoperability is not all that hard for customers to comprehend. In fact people have always demanded interoperability. But MSFT successfully convinced the customers, interoperability is synonymous with MSFT compatibility. Only when customers demand true interoperability, things will change. All the law suits and antitrust actions will either strengthen the hand of MSFT by pus
    • customers are not demanding better interoperability. The concept of interoperability is not all that hard for customers to comprehend. In fact people have always demanded interoperability. But MSFT successfully convinced the customers, interoperability is synonymous with MSFT compatibility. Only when customers demand true interoperability, things will change

      when MS is on 90-95% of the world's desktops and OSX 4% and MS Office dominates on both platforms, then - in a coldly preactical sense - MS compatabil

  • Lawyer fees (Score:4, Interesting)

    by 140Mandak262Jamuna (970587) on Monday September 03 2007, @08:17AM (#20451081) Journal
    Why are the lawyers paid in one full lump sum? What is the incentive for anyone, MSFT, the lawyers and the state to publicize the settlement and make sure all eligible customers actually get something? Why can't they make the lawyer fees a percentage of actual money paid out as compensation? Then these lawyers will be working overtime to publicize and make it easy to file and claim the refund. As it stands it benefits no one but the lawyers.
  • Thats just a cost of doing business for a company that large. Fines at that level are almost meaningless. They spend more on an AD campaign, and they got free press with the suit.
  • This case was brought against MS in 2000. It is now 2007.

    So much for the right to a speedy trial.

    So much for relevance.

    • It's the defendant (here, Microsoft) who has that right, and you still have to invoke it. If you want, you can waive it.

      Further, it's in Microsoft's interests to stall these as long as possible, because that'll cost the plaintiff a lot of money in litigation expenses and deter people from suing them.

      That said, at least this one is better than the previous ones. Other lawyers were settling for a few millions for themselves and coupons for everyone else, with the rest going to buy Microsoft software for the
  • People in Iowa run out and get Microsoft products rather than Apple, or Linux, or Open Office, thereby making Microsoft a monopoly, Microsoft gets hit with $255 million, which will be paid for by their customers and shareholders, the people of Iowa get a little bit back on their purchases, and the lawyers get $75 million. Will someone please explain to me why this is a good thing. (Except a good thing for lawyers, I understand that part).

  • Typical class-action style case (I don't know if this was officially class-action, but it has the same characterstics), where the lawyers get rich and those in the "class" get next-to-nothing. These types of cases are a waste of time.

    The results of the settlement are bullshit too.
    "Individual consumers pocket very little: they can file for $16 for each copy of Windows or MS-DOS purchased over a 12-year period, and $29 for Office."

    Why should anyone get a partial refund for MS-DOS? Is there ANY evidence that
  • This may not be a whole lot of money for a company with Microsoft's cash flow, but it's still good news. Even if it doesn't exactly bankrupt them, Microsoft has been taken to court, convicted, and made to pay over their crimes. That has to count for something. Moreover, lots of people will hear of this. And that is probably the most important result: that people will be told that Microsoft is, in fact, a company that has engaged in illegal business practices. And it's not just a bunch of fringe figures sayi
  • I imagine a lot of eligible Iowans won't be bothered to file for their refunds. What happens to that unclaimed money? Does Microsoft get to keep it? Does it go into some kind of trust or escrow?

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