Microsoft agrees to pay up to $180M to settle Iowa suit

DES MOINES, Iowa — Microsoft Corp. agreed today to pay Iowans up to $179.5 million to settle a class-action lawsuit that claimed the company had a monopoly that cost the state's citizens millions of dollars extra for software products.

The settlement means individuals in Iowa who bought certain Microsoft products between 1994 and 2006 will be eligible for cash. Companies with multiple copies can seek vouchers that will enable them to buy computer equipment and software. The amount that can be claimed will depend on which product and how many copies were purchased during the 12-year period.

For each copy of Microsoft Windows or MS-DOS, customers can claim $16. Microsoft Excel is worth $25 a copy and Microsoft Office, $29 a copy.

For Word, Works and Home Essential software, consumers can claim $10 a copy, according to the agreement.

No proof of purchase will be required for online claims of up to $100 or for mail claims of up to $200. Claimants will be required to sign a legal document saying their claim is accurate. Lying can bring a charge of perjury.

Notification will be sent to the estimated 1 million class members on April 25, the date when they can begin claiming money. The claim period ends Dec. 14.

"Our hope is that as many Iowans that are eligible will in fact make claims under this program," said Des Moines attorney Roxanne Conlin.

Conlin and Rich Hagstrom, an attorney with Zelle, Hofmann, Voelbel, Mason & Gette LLP of Minneapolis, filed the Iowa lawsuit in 2000. The case has been in litigation since and has gone to the Iowa Supreme Court three times for various legal issues.

The lawsuit claimed Microsoft engaged in illegal monopolization and anticompetitive conduct between 1994 and 2006 that caused customers to pay more for software than they would have if there had been competition.

Half of any unclaimed portion of the settlement will be given to Iowa schools to help buy computers, software and other equipment.

Microsoft attorney Rich Wallis said class action cases frequently see significant amounts of money go unclaimed.

The Redmond, Wash.-based company also said it will contribute an additional $1 million to the state of Iowa to administer the program of purchasing equipment for schools.

Wallis said it's the company's intent that the state will not use the millions it will likely receive to replace current spending, but that the money will be in addition to any existing technology spending in schools.

Judge Scott Rosenberg approved the settlement, which is considered preliminary until a final judgment is entered after an Aug. 31 hearing.

Conlin said plaintiffs' attorneys will seek $75.5 million in fees and costs. Microsoft plans to challenge that amount.

Conlin said 150 lawyers worked thousands of hours "with no guarantee of compensation."

She said the firms involved have $50 million invested in the case.