Microsoft Settles Iowa Class Action Suit

Microsoft on Wednesday reached a preliminary settlement in its Iowa class action antitrust lawsuit. Because the settlement is still awaiting court approval, however, the terms of the settlement will not be released until later this year. The plaintiffs had been seeking $330 million from Microsoft.

When the case was filed in 2000, plaintiffs in the Iowa antitrust case alleged that Microsoft had overcharged customers in that state for software purchased since 1994. Despite similarities with the nearly 100 other state-based antitrust cases that Microsoft has faced over the years, the Iowa case differs from all but one other case in a single key way: It actually went all the way to trial. A class action suit in Minnesota also went to trial, but was settled two months after the trial began. All of the other state-based suits against Microsoft were dismissed or settled prior to trial.

As has been the case in most other state-based cases Microsoft has settled, proceeds from the Iowa settlement will at least partially be used to purchase computers and software for underprivileged schools: Half of any unclaimed funds will be provided to the Iowa Department of Education for this purpose.

"One of the best aspects of resolving this case is that we can provide much needed resources to underprivileged schools," said Microsoft associate general counsel Rich Wallis. "We're happy to have this matter behind us so we can focus on the future and build the next generation of products and innovations that enrich the lives of people around the world."

Polk County District Court will hold a hearing in April for preliminary approval of the settlement. If approved, the settlement will be finalized in late August.