## Facts

- Numerous private antitrust actions against Microsoft were consolidated in a multidistrict litigation in the District of Maryland.
- Plaintiffs were primarily consumers and businesses who generally obtained Microsoft software through intermediaries (e.g., OEMs and retailers) rather than purchasing directly from Microsoft.
- Plaintiffs alleged Microsoft monopolized Intel-compatible PC operating systems and maintained that power through exclusionary conduct affecting operating systems and applications.
- Plaintiffs claimed injuries including (1) payment of above-competitive prices for Microsoft applications, (2) foreclosure from cheaper or better competing products, and (3) degraded computer performance from Microsoft’s practices.
- Plaintiffs asserted federal antitrust claims for treble damages and various state antitrust and consumer-protection claims, including claims under state statutes allowing indirect-purchaser recovery.

## Issues

1. Whether plaintiffs who did not buy Microsoft software directly from Microsoft could recover federal antitrust damages despite the indirect-purchaser bar of *Illinois Brick*.
2. Whether foreign purchasers’ claims were barred or limited by the Foreign Trade Antitrust Improvements Act (FTAIA) due to insufficient domestic effects.
3. Whether, and to what extent, state antitrust and consumer-protection claims—including indirect-purchaser claims under state “repealer” statutes—could proceed, including which state’s law applies.
4. Whether certain removed actions should be remanded to state court for lack of federal jurisdiction or removal defects.
5. Whether the court’s threshold rulings warranted certification for interlocutory appeal under 28 U.S.C. § 1292(b).

## Decision

- The court granted Microsoft’s motion to dismiss or for summary judgment in substantial part and denied it in part.
- The court largely dismissed federal antitrust damages claims by indirect purchasers under *Illinois Brick*, rejecting attempts to recharacterize purchasers as “direct” based on licensing and rejecting most asserted exceptions.
- The court limited or dismissed certain foreign plaintiffs’ claims that did not sufficiently allege the FTAIA-required domestic effect on U.S. commerce; foreign claims with a stronger U.S. nexus could proceed.
- The court allowed some state-law claims to proceed, particularly where state law permitted indirect-purchaser recovery and choice-of-law principles supported applying that state’s law; other state claims were dismissed.
- The court granted in part and denied in part plaintiffs’ remand motions, remanding some actions while retaining others in federal court.
- The court indicated it would certify controlling legal questions for interlocutory appeal under § 1292(b).

## Legal Principles

- Under *Illinois Brick*, federal antitrust damages are generally limited to direct purchasers; indirect purchasers cannot recover overcharge damages based on pass-through theories absent a recognized exception.
- A buyer is not treated as a direct purchaser for *Illinois Brick* purposes merely because the product is licensed by the manufacturer when the purchase and payment occur through intermediaries.
- *Illinois Brick* exceptions (e.g., ownership/control or co-conspirator concepts) require specific, sufficient allegations; ordinary vertical relationships with distributors or OEMs do not, without more, convert indirect purchasers into direct purchasers.
- Under the FTAIA, foreign commerce is generally excluded from Sherman Act coverage unless the challenged conduct has a direct, substantial, and reasonably foreseeable effect on U.S. domestic commerce (or fits within import commerce), and the plaintiff’s claim arises from that effect.
- State “Illinois Brick repealer” statutes may allow indirect-purchaser recovery under state law; federal law does not categorically bar such state remedies, but viability depends on the particular statute and applicable choice-of-law rules.
- In removal and remand disputes within an MDL, federal jurisdiction and removal procedure remain case-specific; actions lacking a proper federal jurisdictional basis must be remanded.
- Interlocutory certification under § 1292(b) is appropriate where rulings present controlling legal questions with substantial grounds for disagreement and immediate appeal may materially advance termination of the litigation.

## Conclusion

The court substantially narrowed the litigation by barring most indirect purchasers’ federal antitrust damages claims under *Illinois Brick* and restricting certain foreign claims under the FTAIA, while permitting selected state-law indirect-purchaser and related claims to proceed based on statutory scope and choice-of-law analysis, partially remanding actions lacking a federal jurisdictional basis and preparing the threshold rulings for interlocutory appellate review.


In re Microsoft Corp. Antitrust Litig., 127 F. Supp. 2d 702 (D. Md. 2001)