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Microsoft will pay $5 million in cash and up to $177 million in vouchers to settle a class-action lawsuit brought by Minnesota consumers who accused the company of abusing its Windows monopoly to overcharge for its software.

The Minnesota deal is the first state class action settlement in which Microsoft has agreed to pay cash in addition to providing vouchers. The company has settled 14 similar cases in states across the United States. The Minnesota settlement was approved by the Hennepin County District Court.

As in the other state class action settlements, Microsoft has agreed to make vouchers available to customers who bought its software during a specific time period. The vouchers can be used to buy computer software or hardware.

Minnesota's Deal

In Minnesota, Microsoft will provide up to $174.5 million in vouchers to those who bought operating system and select application software products between May 18, 1994 and March 17, 2003. The voucher amount per copy is $15 for Windows or MS-DOS, $23 for Excel, $23 for Office and $9 for Word, Works, and Home Essentials.

In addition, Microsoft will provide $2.5 million in cash and $2.5 million in general purpose vouchers to the University of Minnesota's Institute for Technology. Microsoft will also give $2.5 million in cash to the Minnesota Legal Aid society, according to a statement distributed by the lawyers who brokered the deal.

Over one million Minnesota consumers and businesses will be eligible to collect refunds on past purchases, the plaintiffs estimate. Half of any unclaimed settlement money and the full value of vouchers that were issued but never redeemed, will go to needy public schools in Minnesota in the form of vouchers, the plaintiffs said.

When the trial began in March, the Minnesota case was the first state class action to be tried in front of a jury. The trial ended when the settlement was announced in April. Details of the settlement were kept under wraps until the judge preliminarily approved the deal on Thursday.

Across the USA

Microsoft has been busy clearing up lawsuits filed against it. Earlier this week it announced settlement agreements with plaintiffs in Arizona and Massachusetts. Also on Thursday a judge in Vermont preliminarily approved a $9.7 million settlement, Microsoft spokeswoman Stacy Drake said.

Class action cases where Microsoft is accused of overcharging for its software are still pending in Nebraska, New Mexico, Wisconsin, Iowa, and New York, Drake said.

The class-action lawsuits stemmed from a federal court finding that Microsoft had abused its monopoly status in the desktop operating systems market to the detriment of consumers. A settlement in the federal case was approved late 2002.

The state of Massachusetts had a separate antitrust claim pending against Microsoft that was shot down on Wednesday. Massachusetts was the lone state still appealing the federal court antitrust settlement.