NEW YORK (AP) — 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 the case. At least seven lawsuits, including one filed last week in San Francisco, 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 is viewed as rich enough and legally savvy enough to weather a continued onslaught of private lawsuits, which may be consolidated into a federal case.
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Among the world’s most profitable companies, Microsoft has about $19 billion in cash and no debt.
But legal experts say the state and federal lawsuits, filed in Alabama, California, Louisiana and New York, could create a short-term challenge at Microsoft as it tries to ensure its legal arguments and trial maneuvers are consistent across different jurisdictions.
Moreover, the lawsuits are likely to reinforce pressure on the software giant to reach an out-of-court settlement with the Justice Department, particularly after the judge appointed a mediator Friday to oversee voluntary negotiations. A settlement would make it far more difficult for private plaintiffs to use the judge’s findings to bolster their cases.
“As more of these lawsuits are filed, you have to assume that Microsoft will look for some way to try to prevent the trial from going to conclusion,” said Richard Thomas Delamarter, an expert on corporate monopolies who teaches antitrust history and technology at Yale University.
“These private cases only add to the pressure.” Indeed, the appointment of a mediator and the prospect of a settlement offset any concern by investors that Microsoft may get swamped by lawsuits.
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, potentially on behalf of millions of consumers.
The lawsuits in Alabama and Louisiana are federal cases, while the ones in New York and California are in state courts. New York and California are among more than a dozen states that make it easier for consumers to sue for allegedly overcharging for products.
Regardless of the eventual outcome of the antitrust case in Washington, the broadened legal assault could compel Microsoft to tone down its aggressive behavior in the computer industry.
Consider the long-running antitrust case against IBM, another famous computer industry monopoly. IBM had to defend itself not only against a Justice Department lawsuit, but also against competitors and private individuals whom the government’s action prompted to file similar complaints.
Although the government eventually dropped its case in 1982, and although most of the private lawsuits were decided in IBM’s favor, the combined weight of the litigation compelled IBM to play it safe in the computer business, allowing rivals to move in on the company’s long-held markets and leading to a protracted decline at the world’s largest computer company.
“You’ll end up with a better behaved Microsoft,” said Delamarter, also the author of “Big Blue: IBM’s Use and Abuse of Power.” “It’s the analogy _ you drive more carefully when you have a police car behind you.”
