Microsoft Iowa Antitrust Settlement is Finalized

On Friday, an Iowa district court judge approved of Microsoft's proposed $179 million antitrust settlement with the state's consumers, ending a seven-year long legal battle. The settlement was originally announced in April but was awaiting final approval by the Polk County District Court.

Iowa originally sued Microsoft on behalf of consumers for $330 million, alleging that the software giant abused its monopoly position in the desktop computing market to overcharge for products such as Windows and Office. Now, under terms of the settlement, consumers in the state who purchased eligible Microsoft software products between May 18, 1994, and June 30, 2006 will receive cash refunds.

These refunds apply to individuals only: Iowan companies seeking refunds will receive vouchers instead. In order to receive refunds or vouchers, however, consumers and institutions will need to file claims by December 14, 2007 and prove that they purchased the software in question. So far, over 63,000 consumers, 740 businesses, and 40 government agencies have filed claims. The state of Iowa itself is expected to soon file a particularly large claim.

The actual refunds are based on which product was purchased: A buyer of any copy of Windows, for example, will get a $16 refund, while Excel buyers can expect a $29 refund. Those who purchased Word or Works can expect a $10 refund. These refunds will arrive "before Christmas" 2007, according to Des Moines attorney Roxanne Conlin, the lead lawyer in the case.

Settlement money that is left unclaimed will also be donated to Iowa public schools in the form of vouchers, a common outcome in Microsoft's various US state antitrust settlements. The vouchers can be used to purchase software or hardware from any manufacturer. Microsoft is also providing $1 million to the Iowa Department of Education so that it can administer the distribution of funds and vouchers.

The most controversial aspect of the antitrust case is that the lawyers who represented Iowa will receive an astonishing $75 million in legal fees, a sum that Microsoft has also agreed to pay as part of the settlement, though they originally contested the amount. "The Des Moines Register" calculated that Roxanne Conlin is receiving over $1000 an hour for her work on the case.

With Iowa behind it, Microsoft faces only one major state-based antitrust case, with Mississippi. At one time, the company faced over 200 class action lawsuits around the country in the wake of its US federal antitrust case. With rare exception, most of these cases were consolidated and settled before going to trial.