Microsoft offers an apology for past practices

Thursday, March 18, 2004

Microsoft offers an apology for past practices
Opening statements in Minnesota trial

By JOSHUA FREED
THE ASSOCIATED PRESS

MINNEAPOLIS -- Microsoft Corp. apologized for its past anti-competitive practices yesterday.

"Yes, we acknowledge that, and we apologize for it," said David Tulchin, a Microsoft attorney, during opening statements in the first consumer class-action antitrust case to go to trial against the company.

"The conduct involved competition that went over the line. The question for you is whether or not consumers were overcharged," he said in his highly unusual apology for the software maker.

Tulchin was referring to actions that were the subject of a settlement Microsoft reached with the Justice Department in 2001 in a lawsuit regarding the company's operating-system monopoly.

That settlement was admitted into evidence in the Minnesota case, which alleges that violations included Microsoft's Word and Excel software.

Attorneys for the plaintiffs gave jurors an overview of their case earlier in the week, alleging that Microsoft overcharged about 1 million people or businesses in Minnesota for about 9.7 million software licenses issued between 1994 and 2001.

The plaintiffs seek damages of up to $425 million, or up to $505 million if the court rules that the damages can be adjusted for inflation.

Tulchin told jurors that Microsoft may have competed vigorously with other software makers, but not illegally.

He asked jurors, "Should Microsoft just stop competing so others can catch up?"

Tulchin said prices for Microsoft's Windows operating systems have hovered around $50 each, and prices for Word and Excel have dropped.

In addition, he attacked the idea that Microsoft's practices have hurt consumers.

The lawsuit names six representatives of the class of people allegedly hurt, and Tulchin told jurors that four of them have connections to the law firm bringing the case, including one who lives with a secretary at the firm.

"Who really was injured by anything here? We think the evidence will show that no one was," Tulchin said.

In similar cases, Microsoft has reached settlements with nine states and Washington, D.C., totaling $1.5 billion. Cases were dismissed in 16 states.

In the 2001 settlement of the case brought by the federal government, Microsoft was found to have illegally monopolized the operating system market using Windows.

The trial judge ordered a breakup of Microsoft, but a federal circuit court overruled the decision. It did, however, uphold the judgment that Microsoft held a monopoly with Windows.

Microsoft Chairman Bill Gates and Chief Executive Steve Ballmer are scheduled to testify in the Minnesota trial, which is expected to last more than three months.

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