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Tuesday, November 23, 1999
Private lawsuits target Microsoft
Software giant faces wave of cases, but its stock keeps on rising
By David E. Kalish
Associated Press
NEW YORK - A growing wave of private lawsuits against Microsoft Corp. suddenly has the company fighting on several legal fronts at once, raising the stakes in its antitrust battle in Washington and intensifying pressure on Microsoft to settle with the Justice Department.
At least seven suits have been filed on behalf of computer users in response to a judge's Nov. 5 finding that Microsoft is a software monopolist that routinely bullies high-tech rivals. The finding provided grist for allegations by computer users that Microsoft's monopoly gave it substantial leeway to overcharge for its Windows software program. Microsoft, headed by Chairman Bill Gates, is viewed as rich enough and legally savvy enough to weather a continued onslaught of private actions, which may become consolidated into a federal suit.
Legal experts say the state and federal lawsuits, filed so far in Alabama, California, Louisiana and New York, could create a short-term coordination challenge at Microsoft as it tries to ensure its legal arguments and trial maneuvers are consistent across different jurisdictions.
The suits are likely to reinforce pressure on the software giant to reach an out-of-court settlement with the Justice Department, particularly after the judge in the trial appointed a mediator last Friday to oversee voluntary negotiations. A settlement would make it far more difficult for private plaintiffs to use the judge's findings to build a foundation for a case against Microsoft.
The appointment of a mediator and a prospect for a Microsoft settlement offset any concern by investors on Monday that Microsoft may get swamped by lawsuits. The company's stock was sharply higher, rising more than 4 percent, or by $3.81 at $89.81, as of the close of trading Monday on the Nasdaq Stock Market.
So far, consumers have filed three cases in San Francisco; one in Orange County, Calif.; and one each in New York; New Orleans and Birmingham, Ala. They all seek class-action status.
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