Disadvantaged schools in five more states and the District of Columbia stand to benefit from the latest round of antitrust settlements from Microsoft Corp.

Microsoft agreed to settle class-action antitrust and unfair competition lawsuits brought by customers in these regions for vouchers worth $200 million. The settlements, announced Oct. 28, would end those lawsuits in Kansas, North Carolina, North Dakota, South Dakota, and Tennessee, in addition to Washington, D.C.

The cases involve customers who joined in class actions alleging that Redmond, Wash.-based Microsoft violated state antitrust laws and laws against unfair competition.

The Kansas case was settled for $32 million, and the District of Columbia case was settled for $6.2 million, said Brad Smith, Microsoft senior vice president and general counsel. Those two settlements had been approved by the courts.

He did not give figures on settlements for the other four lawsuits, which have yet to be approved by the courts. However, Henry Howe, a Grand Forks, N.D., attorney who was a plaintiff, said the North Dakota case was settled for $9 million pending the court approval.

In all, Microsoft has now settled similar lawsuits in nine states and the District of Columbia for a total of $1.55 billion. Agreements were announced earlier this year for lawsuits in California, Florida, Montana, and West Virginia.

The company said class actions are still pending in Arizona, Iowa, Minnesota, New Mexico, and Wisconsin.

Under the settlements, Microsoft will provide vouchers for customers to purchase hardware, operating systems, training, and software from various vendors, including Microsoft and a key rival, Apple Computer. Half of the unused vouchers will be given to schools in these states to help needy children.

“To look at all this in perspective, it’s clear that we’ve made a good deal of progress in the past year,” Smith said. “And it’s clear that we have to keep focusing, keep moving forward.”

He said the company is working to improve relationships with other companies and with the government.

Microsoft said it has already set aside adequate reserves for the settlements.

“It’s not a hugely significant amount, but it does count against income,” said Matt Rosoff, an analyst with Directions on Microsoft. “With $100 million here and there, it’s somewhat significant when you’re talking about a company with net income of $2.6 billion per quarter.”

Curtis Wolfe, chief information officer for the state of North Dakota, said he anticipates the coupons will represent “a significant windfall” for North Dakota schools, especially given the fact that a tight budget year has precluded educators from spending as much as they would have liked on technology.

“Certainly in North Dakota, we constantly find ourselves challenged to update technology,” he said. Those challenges have grown in recent years as North Dakota has turned to distance learning as a means of broadening the scope of classes available to students in some of the state’s more rural areas.

Forty-three North Dakota school districts, with a total of about 8,300 students, qualify for the settlement based on their number of low-income students. To qualify, at least 50 percent of a district’s students must be eligible for reduced-fee or free lunches under the national school lunch program.

Given that the money can be used by schools to purchase a wide array of technology equipment, Wolfe said educators would welcome the vouchers.

“I am absolutely confident that we’ll make excellent use of this settlement,” he said.


Microsoft Corp.