Four California city and county governments, including those of Los Angeles and San Francisco, sued Microsoft late last week for abusing its monopoly market power and overcharging them for Windows and various Microsoft Office products. The class-action lawsuit appears to emulate the successful class-action lawsuits that various US states brought against Microsoft in the wake of its US antitrust settlement. Thus far, Microsoft has paid almost $2 billion to settle those cases.
"\[Microsoft has\] violated the antitrust and unfair competition laws of the State of California," the class-action lawsuit reads. It also asks the courts to require that the company pay an unspecified amount for damages and return "profits reaped ... as a result of Microsoft's \[strategies\] to restrain trade, destroy competition, and monopolize the world markets for personal computer (PC) operating systems and word processing and spreadsheet software applications."
California's successful class-action suit against Microsoft covered businesses, consumers, and schools, but not governments. "When it became clear that governmental entities were going to be excluded from the \[California\] consumer class action \[against Microsoft, which is worth $1.1 billion\], it was incumbent on all of us to do whatever possible to protect our various municipalities," San Francisco City Attorney Dennis Herrera said.
The cities of San Francisco and Los Angeles and the counties of Contra Costa, Los Angeles, Santa Clara, and San Mateo are suing Microsoft. The cities and counties are seeking to recoup some of the costs they paid for various Microsoft products between 1995 and 2001, when the company settled most of its antitrust lawsuits.
Microsoft says it provided great software solutions to the governments. "We value our relationship with these cities and have been grateful for the opportunity to provide them with software at very reasonable prices," a Microsoft spokesperson said Friday. The company is reviewing the lawsuit.