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Microsoft may see flood of civil lawsuits

Logo - USA TodayJuly 2, 2001 | USA Today

By Edward Iwata

SAN FRANCISCO — A torrent of new civil lawsuits may drown Microsoft in the wake of last week’s appeals court ruling that upheld an earlier finding that the software colossus is an illegal monopoly. It was a huge win for consumers and rivals of Microsoft. Their attorneys now need not spend thousands of hours and millions of dollars trying to prove Microsoft broke federal antitrust law.

“All (consumers and businesses) have to do now is show causation — or how they were injured by the violation — and prove damages,” says leading antitrust expert Herbert Hovenkamp of the University of Iowa.

Legal experts say lawyers for Sun Microsystems, America Online’s Netscape and other rivals of Microsoft can argue that the software firm’s dominance hurt their market share and cost them opportunities to bring new products to the market.

Industry and legal sources say Sun, AOL and several major computer manufacturers already are exploring with antitrust experts how their legal hand has been strengthened by the federal ruling. They say it’s too early to tell if any, or how many, will sue Microsoft.

The ruling also encouraged attorneys in the 100 or so federal and state class-action lawsuits against Microsoft. Those lawyers now can focus on arguments that Microsoft was able to overprice its products and hurt millions of consumers nationwide.

“This helps us greatly,” agrees Stanley Chesley, a class-action lawyer at Waite Schneider Bayless & Chesley in Cincinnati who won a $3 billion settlement from breast-implant-maker Dow Corning. The potential new lawsuits “will increase the magnitude of consumers and businesses trampled by Microsoft,” he says.

In California, where state antitrust laws are especially strong, lawyers are storming ahead with 20 lawsuits consolidated into one class action. “Now we have a legal framework to prove our case,” says Terry Gross of Gross & Belsky in San Francisco.

Microsoft spokesman Jim Cullinan said Friday that nothing in the upheld federal ruling backs the legal argument that Microsoft overcharged consumers for its software.

Jabbing at business rivals who may file lawsuits, Cullinan said, “Our competitors spend more time with their lawyers than they do with their R&D teams. It wouldn’t be surprising if they want to litigate rather than innovate.”