A California judge has allowed a class action suit against Microsoft to proceed, the first such defeat for the company since its guilty verdict in its antitrust law suit. The suit alleges that Microsoft overcharged for Windows 98, harming California consumers. Numerous other class action law suits against the company have been overturned because of a legal precedent, but this doesn't apply to California, which has its own consumer protection laws. San Francisco Superior Court Judge Stuart R. Pollack said in his ruling that the trial will determine whether consumers were forced to pay unreasonably high prices for Microsoft products.
"This case involves a very large number of claimants with relatively small amounts at stake," Pollak said, in reference to Microsoft complaints that this ruling could result in repetitive litigation. "Most consumers have little incentive to litigate independently since the costs of litigation undoubtedly would overwhelm their potential recovery."
Courts in Rhode Island, Kentucky, Iowa, Texas, Nevada, and Hawaii have already thrown out similar class action suits because of a Supreme Court ruling stating that consumers cannot sue a company for overcharging them if they didn't buy that product directly from the company. Since most consumers get Windows with a new PC, they are unable to sue Microsoft for overcharging them. Soon after its guilty verdict in the antitrust trial, Microsoft faced over 135 class action laws suits, though many of these were since thrown out. California, however, has consumer protection laws that supercede the Supreme Court ruling.
Microsoft says that it is reviewing the ruling. "Given California law, this ruling was not unexpected,'' said Microsoft spokesman Jim Cullinan. "This is just the first step in a very long process." Attorneys will meet with Judge Pollack in early October to set up a trial date