California Court Upholds Microsoft Settlement

Microsoft's mammoth $1.1 billion California class-action settlement remains unchanged as the court rebuffs a remaining appeal over the terms of the payout.

The Court of Appeal of the state of California upheld Microsoft Corp.s $1.1 billion class-action settlement this week, turning away a lingering claim over the terms of the historic payout.

The states First District appeals court ruled that a claim brought by California resident Charles Q. Jakob had no merit as it reaffirmed that the terms of Microsofts 2003 class-action settlement were fair, adequate and reasonable.

Jakobs claim objected to a provision in the settlement that would allow the software giant to recoup a share of the money it was ordered to award to consumers in the state that subsequently went unclaimed.

/zimages/6/28571.gifClick here to read about Microsofts settlement of a class action suit with Massachusetts .

The original case, which charged that the company, based in Redmond, Wash., had used its dominant position in the operating system market to overcharge for its Windows product line, covered more than 50 million software licenses sold to California consumers and businesses between 1995 and 2001.

Under the 2003 ruling, the California Superior Court ordered Microsoft to distribute over $1 billion in vouchers that could be redeemed for software or hardware from any manufacturer.

The vouchers, which ranged in value from $5 to $29, were to be awarded to claimants who qualified, with a third of any money leftover from undistributed vouchers to be returned to Microsoft. The remaining two-thirds of the funds would be handed over to California schools.

Jakob, who could not be reached for comment, maintained in his appeal that the so-called "cy près" provisions that allowed for Microsoft to get back some of the unclaimed settlement funds were an abuse in discretion.

/zimages/6/28571.gifRead details here about Microsofts antitrust settlement with

A Microsoft spokesperson said the firm was "very pleased" that the Court of Appeals had approved the settlement and the cy près distribution.

Based on the terms of the settlement, Microsoft could pay as little as $367 million in cash to Californias schools if the minimum number of vouchers were awarded.

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