Settlement Recovery Center aims to help small businesses sift through Microsoft maze
Silicon Valley Biz Ink, December 12, 2003

In July, a San Francisco judge approved a $1.1 billion settlement in a class-action lawsuit against Microsoft Corp., allowing consumers and primarily small businesses to recover overcharges linked to anti-competitive behavior.

In response, attorney and former software reseller Howard Yellen founded San Francisco-based Settlement Recovery Center , LLC to help businesses work through the paperwork and get a refund to which they're entitled.

The company charges 30 percent of the recovery and is paid only when the settlement check clears.

Biz Ink reporter Steve Tanner talked to Yellen, CEO of Settlement Recovery Center, to find out who is eligible for a refund and what companies can expect.

Who is entitled to a piece of the Microsoft antitrust settlement in California ?

The short answer is, just about everyone.

The settlement in California is for $1.1 billion. It covers February 1995 through December 2001. Technically, anyone who purchased qualifying Microsoft licenses -- Microsoft Word, Excel, Office or any version of Windows -- in that time frame ... is entitled to get a recovery.

So, large corporations that paid six or seven figures for an enterprise-grade Microsoft application do not qualify?

Exactly. The reason large companies are excluded is because this is a class-action case that only includes people who [bought at the retail level].

This would include consumers, right?

Yes, there are two sides to this settlement. There's a consumer side, which is pretty straightforward. There's a form folks can fill out, and they can get up to $100 [each] for up to five qualifying products.

But approximately 80 percent of the money is targeted to businesses, by and large small to midsize business. Settlement Recovery Center is focused squarely on those customers, helping them get their full entitlement under that settlement.

How much can the typical small business expect to recover from Microsoft?

This is why Settlement Recovery Center exists. You can look at what you have on your PCs now and you might be entitled to something. But if you conduct a full audit, which frankly is difficult for folks who don't know the process, we are finding typically that there is between $150 and $200 per employee of recovery that companies are entitled to.

If you go back to early 1995, we were still in a DOS and Windows 3 environment. Since then, just from the operating system side, we've gone from DOS to Windows to Windows 95 to Windows 98, all the way through to XP.

That $150 to $200 is based on a typical upgrade process, not someone who has made every upgrade along the way. We've actually worked with folks who are getting closer to $300 per seat, but that's a little on the high side.

Hewlett-Packard, for example, sells computers with the Windows OS. But would HP be entitled to a recovery for the machines its employees use in-house?

Well, that's an interesting question; it depends on how they acquired the licenses.

If they acquired their licenses directly from Microsoft, since they're a large company, they might not be entitled to a recovery. The key is whether you acquired your licenses indirectly, not through Microsoft.

So the licenses had to have been acquired through a retailer?

From a distributor, a computer reseller or a software store.

When HP sells its computers, they come with Windows installed, but it's called an original equipment manufacturer [OEM] license. That counts, even though you did not make an explicit purchase of an OS.

The problem is, over the seven-year period -- even if you only have 10 employees -- you may have gone through 35 computers and bought licenses from seven or 10 different sources. Knowing all the places to look and finding the proper documentation is difficult, and that's why companies are hiring Settlement Recovery Center .

Do you work with consumers as well as businesses?

We have a lot of resources for consumers; but for consumers, the process is fairly straightforward. Our Web site has a lot of information and forms you can download.

We don't work for consumers directly, but we are in the middle of a process where we will enable consumers to donate their vouchers to a charity of their choice. You can donate up to $650 worth of vouchers, and any nonprofit can receive up to $10,000.

How aware are businesses, most of which use Microsoft software, that they are entitled to settlement recovery?

There's a process going on right now to make people aware of the settlement. There's a very short-fuse deadline on this. The drop-dead date is March 15.

In our work, we're finding that it's sort of split and some companies are not aware of this. But for those that are, in general, the notice is sitting on an information technology worker's desk, without them knowing what to do with it. It's complicated. The settlement itself is more than 70 pages of legal mumbo-jumbo, and it's sort of a daunting task.