Consumer sues Microsoft over prices

A California man filed a lawsuit yesterday against Microsoft for allegedly excluding competition in the markets for operating system, word processing and spreadsheet software. The lawsuit, filed by Charles Lingo, of San Jose, seeks injunctive relief and damages for allegedly denying purchasers of computers with Windows, Word or Excel pre-installed on their machines a 'competitive price and free choice among competing products, as well as the benefits of software innovation.'

A California man filed a lawsuit yesterday against Microsoft for allegedly excluding competition in the markets for operating system, word processing and spreadsheet software.

The lawsuit, filed by Charles Lingo, of San Jose, seeks injunctive relief and damages for allegedly denying purchasers of computers with Windows, Word or Excel pre-installed on their machines a "competitive price and free choice among competing products, as well as the benefits of software innovation."

Microsoft spokesman Tom Pilla said the company had not yet reviewed the lawsuit and therefore could not comment on it.

The lawsuit refers to allegations made in the US Department of Justice's antitrust lawsuit against Microsoft and cites testimony from that trial, including complaints by computer manufacturers that they preinstall Windows on computers because there is no commercially viable operating system alternative.

The lawsuit says Lingo is representing a class of people who purchased computers with the software since May 18, 1994, which is four years before the Justice Department's lawsuit was filed. That federal lawsuit alleges Microsoft used its Windows operating system monopoly to dominate other areas through restrictive deals with manufacturers and Internet service providers, and by tying its browser to Windows. In its defense, Microsoft claims the integration of its browser and Windows enhances the functions of both programs and argues that its business deals with partners are common practice and pro-competitive.

The lawsuit filed yesterday cites a study released by the Consumer Federation of America that concluded that Microsoft charges monopoly prices for its software.

The lawsuit also accuses Microsoft of not disclosing or delaying disclosing to some of its rivals the Windows application programming interfaces (APIs) software developers need to make their applications interoperate with Windows.

"To further disadvantage its application software competitors, Microsoft has made agreements and engaged in other concerted actions, ... with the purpose and effect of suppressing browser and Java software innovations and thereby excluding competition not only for Windows operating software but also for Microsoft Word and Excel applications," the lawsuit claims in another claim.

The lawsuit goes on to accuse Microsoft of "forcibly" enlisting the aid of PC sellers to exclude application competition by threatening to stop selling them Windows or upgrades.

In addition, Microsoft has entered into licensing arrangements that bundle Microsoft Word and Excel applications with Windows operating software, the lawsuit alleges.

"In essence, Microsoft has accomplished this bundling by price discriminating in two ways: It has offered and given price reductions to sellers of personal computers for Windows operating software in exchange for their bundled purchase of Word and Excel software," the lawsuit alleges. "On other occasions, to pick up Word and Excel market share early in the class damage period, it has charged little or nothing for Word or Excel, so long as Word or Excel were bundled with Windows operating software.

Microsoft, based in Redmond, Washington, can be reached at +1-425-882-8080 or http://www.microsoft.com/.

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