Judge Orders Microsoft To Pay $967K To Massachusetts

U.S. District Judge Colleen Kollar-Kotelly criticized the attorney general in Massachusetts for offering "deficient documentation and lack of explanation" for the higher figure, calling her decision a "generous award."

Massachusetts had demanded $2,012,377.72 from Microsoft.

Kollar-Kotelly's ruling was a final jab at Massachusetts, the only state to refuse to settle the landmark antitrust case. In its legal appeal, the state had earlier accused the judge of a "profound misunderstanding" when she approved the settlement among Microsoft, the Justice Department and 18 other states.

The state's attorney general, Tom Reilly, said he was satisfied with the reimbursement.

"I am pleased that Microsoft will pay for the costs associated with this antitrust action and look forward to upcoming arguments in federal appeals court," Reilly said in a statement. "This case has serious implications for competition and consumers and will have a significant impact on the future direction of our economy."

Microsoft, with a market capitalization of about $313 billion, has a cash hoard of $49 billion. Its 2003 sales were just over $32 billion.

"We are pleased with the court's opinion to reduce Massachusetts' request for legal fees by over fifty percent," Microsoft spokeswoman Stacy Drake McCredy said. "We respectfully disagreed with Massachusetts' request for fees on the basis that they did not prevail on the vast majority of their original claims. Our priority is to move past this case and to build more constructive relationships with state governments."

The judge criticized some of Massachusetts' requests for reimbursements as "wholly deficient" because they identified expenses only as "phone calls" or "airfare." She said the state provided more than 100 pages of receipts but she indicated these weren't sufficiently documented.

"The court is provided no explanation regarding these expenses other than conclusory statements that the expenses should be awarded," the judge said.

The payment to Massachusetts was considerably more than Microsoft paid to West Virginia, the last state to settle the antitrust case. Microsoft paid just over $300,000 in unpaid attorneys fees and provided about $19.7 million in vouchers for free computer hardware and software, including products from Microsoft's rivals.

The long-running court battle culminated last November when Kollar-Kotelly accepted nearly all the settlement provisions negotiated among Microsoft, nine states and the U.S. government. She rebuffed arguments by nine other states and the District of Columbia that tougher sanctions were essential to restore competition in the computer industry.

All the holdout states except Massachusetts have since joined in the settlement, which gives Microsoft rivals more flexibility to offer competing software features on computers running its flagship Windows operating system.

Microsoft earlier agreed to pay $25 million in legal reimbursements to California, Connecticut, Florida, Iowa, Kansas, Minnesota and Utah. The amount was divided among states based on how much they spent on the antitrust case. California bore the brunt of those legal costs.

Microsoft had earlier agreed to pay $10 million more in legal fees to New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina and Wisconsin. Those states agreed last year with the Justice Department to settle the case.

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