Microsoft settles embarrassing antitrust suit in Iowa

Microsoft Corp. Wednesday said it has agreed to settle a class-action lawsuit in Iowa that, during its trial phase, had resulted in the unearthing of numerous internal documents and e-mails that were embarrassing to the company.

Plaintiffs in the case, known as Comes. vs. Microsoft Corp., had sought as much as US$330 million in damages to compensate Microsoft users in Iowa who allegedly were overcharged for software as a result of anticompetitive practices by the company. The terms of the settlement aren't being disclosed pending preliminary approval of the deal by the Iowa state-court judge who is overseeing the case. A hearing on the settlement is scheduled for April 20, according to Microsoft and attorneys for the plaintiffs.

The trial, which began in mid-November, was a treasure trove of cringeworthy comments and messages from Microsoft employees. The documents entered as evidence included a 2004 internal e-mail in which Jim Allchin, then Microsoft's Windows development chief, complained about the progress of Windows Vista and said that he would if he wasn't a Microsoft employee.

After the e-mail came to light in December, Allchin said in a blog posting that he had been in an effort to get the attention of top executives Bill Gates and Steve Ballmer.

The plaintiffs in the Iowa case also publicized the transcript of a 1996 speech by a Microsoft , who referred to independent software developers as "pawns" and compared wooing them to write applications for Windows and the company's other software platforms with convincing someone to have a one-night stand. And they highlighted a 2003 between Allchin and another Microsoft executive about the possibility of the company introducing a rival to the iPod or seeking a partnership with Apple Inc.

In addition, the lawyers for the plaintiffs last month that Microsoft was withholding key application programming interfaces from competing software vendors, which would be a violation of the company's 2002 antitrust settlement with the U.S. Department of Justice.