Iowa Antitrust Case Costs Microsoft $255M

The judge in charge has approved the payout for the case, which was settled seven months ago. Iowa citizens will get up to $179 million in refunds and the attorneys will get $75 million, $8 million of which covers expenses. There's another $1 million in there for legal aid. Individual consumers pocket very little: they can file for $16 for each copy of Windows or MS-DOS purchased over a 12-year period, and $29 for Office. Such a payout would serve as a deterrent only if all 50 states had sued and won similar amounts. Alone it's a slap on the wrist.

Comments

Alone it's a slap on the wrist.

[smchris]

Who says it's "alone"? Here in Minnesota in '04 MS bought me a cheap printer, refurb Epson scanner, and three LinuxStore keyboards.

Re:Alone it's a slap on the wrist.

[Anonymous Coward]

all cheap throwaway consumables.

Re:Alone it's a slap on the wrist.

[WhatAmIDoingHere]

If all 5m residents of his state got $251, that's a total of $1,255,000,000 which is enough to hurt ANY company. "But Micro$oft has liek $9b in cash!" so? That's still a LOT of money. That's almost as much as they lose on their X-Box devision every year (zing).

And a payout like that would encourage other states to follow with their own lawsuits. "Remember that $251 check you got from Microsoft? I was the guy who went after the big bad company. Vote for me!"

Re:What's that sound?

[Anonymous Coward]

The sound of MS getting stung for millions is strangely similar to the sound of Gates slapping his wallet on the desk and asking "you got change? Smallest bill I got is a billion"

A Slap on the Wrist?

[doyoulikeworms]

Since when is a quarter of a billion dollars a slap on the wrist? Sure, it's not earth-shattering, but come on, man!

Re:A Slap on the Wrist?

[Swampash]

Since when is a quarter of a billion dollars a slap on the wrist?

When it's imposed upon an entity that makes 13 billion dollars every three months and records that against offshore subsidiaries that pay no tax?

Just a thought.

and here's the math...

[martin-boundary]

Cost of 17.9 million x $10 dollar rebate vouchers on future Microsoft software purchases for Iowa citizens: $179 million

Cost of 7.5 million x $10 dollar rebate vouchers for a team of attorneys: $75 million

Look on the senior partner's face when 25 trailer trucks full of printed rebate vouchers enters the parking lot: priceless.

There are some jokes money can't buy. For everything else, there's Slashdot.

$75 million!

[drspliff]

And the attorneys will get $75 million, $8 million of which covers expenses.

I call bullshit, why are they getting this when their expenses are significantly lower and it isn't part of the money given out to everybody who bought Windows?

I'd be seriously pissed if I found out lawyers were skimming massive amounts from public settlements on behalf of my state or county. Where's it going eh?

Re:$75 million!

[Manchot]

I call bullshit, why are they getting this when their expenses are significantly lower and it isn't part of the money given out to everybody who bought Windows?

I know that it's popular on Slashdot to vent against lawyers who do class action suits, but come on. You said it yourself: the law firm incurred $8 million in expenses to see this thing through. Yes, they ended up earning $75 million (because they won), but how much would they have gotten if they lost? Nothing; in fact, should they have lost, the judge could've ordered them to pay Microsoft's fees (which are likely even higher). Eight million is quite a large amount of money to gamble, especially considering that the lawyer in this case has her own law firm, and probably paid those expenses out-of-pocket. All told, the market's decided that a 30% contingency is fair for such a high risk, and I'm inclined to agree.

Moreover, I'd like to know how you'd "fix" the system as it stands. Obviously, you cannot ban class actions or limit the damages, because in many ways they're the only recourse that a bunch of people screwed by a corporation have, without the government (the largest class of them all) stepping in. You cannot place any limits on class action lawyers' pricing structures, either, because that'll have the effect of decreasing the number of class actions we have. No lawyer is going to take such an expensive case on a 10% contingency.

The only way that I can see is to have the government step in more often when a company has screwed people. Unfortunately, the DoJ hasn't really been prosecuting misbehaving corporations since early 2001: I wonder why?

Thank god

[evwah]

Thank god I bought 14,572 copies of windows in the past 12 years.
14,572x16=233,152

4.)Profit!!

Legal Fees

[Double Entendre]

A lot of people are scoffing at the legal payout: 75m (67m effectively, without expenses). While it's incredibly high out of context, it actually makes sense over the course of a 6 year ordeal. I don't know how they structured the award settlement with the firm, but I'll simply go with the idea that it was purely labour-based.

Assume that the average legal fee at the firm is about USD 500 per hour. 67m buys 134k hours which equates to roughly 15.29 consecutive years of labour for one person that works 24 hours a day, 365 days a year. I'm guessing this likely had a legal team of 10+ people. If we were to take it at the low estimate of 10 people, that's about 1.5 years of work per team member on the suit - or ~547 working days spread over 6 years.

That sounds a lot more reasonable to me. Plus, class-action isn't all it's cut out to be. Mergers and acquisitions can be much more lucrative.

Lawyer fees

[140Mandak262Jamuna]

Why are the lawyers paid in one full lump sum? What is the incentive for anyone, MSFT, the lawyers and the state to publicize the settlement and make sure all eligible customers actually get something? Why can't they make the lawyer fees a percentage of actual money paid out as compensation? Then these lawyers will be working overtime to publicize and make it easy to file and claim the refund. As it stands it benefits no one but the lawyers.

Re:some zeros needed here,,,,

[apodyopsis]

..and people buy it of their own free will

sorry? come again?

have you actually tried to buy a new PC without MS software on it? I have. It has been more or less impossible for many years, it is only comparatively recently that OEMs have begun to offer free alternatives. I am MS free at home. I do not buy MS of my own free will yet I find it crammed down my throat with every PC purchase. Of my own free will indeed.....hah!

*yawn*

[Real1tyCzech]

This case was brought against MS in 2000. It is now 2007.

So much for the right to a speedy trial.

So much for relevance.