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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29813)	11/24/1999 7:41:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

NEW YORK (AP) - A growing wave of private lawsuits against Microsoft Corp. suddenly has the company fighting on several legal fronts at once, raising the stakes in its antitrust battle in Washington and intensifying pressure on Microsoft to settle with the Justice Department. At least seven suits, including one filed Monday in a state court in San Francisco, have been filed on behalf of computer users in response to a judge's Nov. 5 finding that Microsoft is a software monopolist that routinely bullies high-tech rivals. The finding provided grist for allegations by computer users that Microsoft's monopoly gave it substantial leeway to overcharge for its Windows software program. Microsoft is viewed as rich enough and legally savvy enough to weather a continued onslaught of private actions, which may be consolidated anyway into a federal suit. Among the world's most profitable companies, Microsoft is sitting on a cash hoard of about $19 billion and has no debt. But legal experts say the state and federal lawsuits, filed so far in Alabama, California, Louisiana and New York, could create a short-term coordination challenge at Microsoft as it tries to ensure its legal arguments and trial maneuvers are consistent across different jurisdictions. Moreover, the suits are likely to reinforce pressure on the software giant to reach an out-of-court settlement with the Justice Department, particularly after the judge in the trial appointed a mediator last Friday to oversee voluntary negotiations. A settlement would make it far more difficult for private plaintiffs to use the judge's findings to build a foundation for a case against Microsoft. ``As more of these lawsuits are filed, you have to assume that Microsoft will look for some way to try to prevent the trial from going to conclusion,' said Richard Thomas Delamarter, an expert on corporate monopolies who teaches antitrust history and technology at Yale University. ``These private cases only add to the pressure.' Indeed, the appoinment of a mediator and a prospect for a Microsoft settlement offset any concern by investors on Monday that Microsoft may get swamped by lawsuits. The company's stock was sharply higher, rising more than 4 percent, or by $3.811/4 at $89.811/4, as of the 4 p.m. EST close of trading on the Nasdaq Stock Market. So far, consumers have filed three cases in San Francisco; one in Orange County, Calif.; and one each in New York; New Orleans and Birmingham, Ala. They all seek class-action status, potentially on behalf of millions of consumers. The suits in Alabama and Louisiana are federal cases, while the ones in New York and California are in state courts. New York and California are among more than a dozen states that make it easier for consumers to sue for allegedly overcharging for products. Regardless of the eventual outcome of the antitrust case, the broadened legal assault could compel Microsoft to tone down its aggressive behavior in the computer industry. Consider the long-running antitrust case against International Business Machines (NYSE:IBM - news) Corp., another famous computer industry monopoly. IBM had to defend itself not only against a Justice Department suit, but also against competitors and private individuals whom the government's action prompted to file similar complaints Although the government eventually dropped its case in 1982, and although most of the private lawsuits were decided in IBM's favor, the combined weight of the litigation compelled IBM to play it safe in the computer business, allowing rivals to move in on the company's long-held markets and leading to a protracted decline at the world's largest computer company. ``You'll end up with a better behaved Microsoft,' said Delamarter, also the author of ``Big Blue: IBM's Use and Abuse of Power.' ``It's the analogy - you drive more carefully when you have a police car behind you.' The reverberations in the Microsoft case, though, may take some time to reach Wall Street. Even though the private lawsuits may seek billions of dollars in damages to compensate for Microsoft's alleged overcharges, investors for the time being remain focused on the company's robust profits. ``The stock is in the midst of a bull market,' said Brian Belski, chief investment strategist at George K. Baum & Co., in Kansas City, Mo. ``It's just too much of a risk not to own the stock.'