Consumers set for Payout in Microsoft Case

Greg Palast

For The Observer/Guardian UK

All British users of Windows software – and that’s almost everyone with a PC – could be in for a payment from Microsoft as a result of the US government’s case against it for monopolising the market for operating systems.

In an exclusive interview with The Observer, David Boies, the US Department of Justice’s chief trial lawyer in the case, said British and other non-American purchasers of Windows or Windows equipment have been overcharged for the software and, and under US law, may collect triple the excess as compensation.

But first the federal court must rule Microsoft a monopoly as charged by the US government. Few doubt this will be done by the end of the year. Then the overcharge resulting will be determined in separate class-action suits brought by private lawyers.
Boies, America’s top anti-trust lawyer, said that while rarely used, US law permits anyone outside the US harmed by a US-based pricing conspiracy to receive the same recovery as US citizens.

This would require British citizens to contact a US lawyer in private practice to represent them.

Even though the alleged Windows monopoly may have resulted in overcharges of as little as 10 per consumer, it is feasible and lucrative for lawyers to prosecute the cases as US courts are likely to consolidate the millions of complaints into a single class-action trial.

Each of the several million British users of Windows need not apply for compensation so long as a handful come forward to represent their class of victim. It would become Microsoft’s costly job, if found liable, to locate each UK buyer of Windows or Windows computers.

Boies would not estimate the Microsoft overcharge but he noted that Microsoft takes about 65 per cent of the amount it charges for the operating software as profit, a portion of which he would identify as the result of illegal anti-competitive conduct.

But even at 10 per consumer, British buyers might expect payment of up to 300 million.
For its part, Microsoft claims to have taken 95 per cent of the operating systems market by producing the better mousetrap at a low price.

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Gregory Palast’s column “Inside Corporate America” appears fortnightly in the
Observer’s Business section. Nominated Business Writer of the Year (UK Press
Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).