Pro‑Sys Consultants Ltd. v. Microsoft Corporation
Antitrust, Liability, Causation, Damages, Class Certification for Plaintiffs
Supreme Court of Canada
Microsoft settled with indirect purchasers of Microsoft software in Canada for CAD $517 million in Pro-Sys Consultants Ltd. and Neil Godfrey v. Microsoft Corporation and Microsoft Canada Co. Class Members who are non-volume licensees will receive cash payments and volume licensees will receive volume licensee vouchers.
Pro-Sys Consultants Ltd. v. Microsoft was filed in December of 2004 and was one of the first indirect purchaser antitrust class actions to be certified in Canada. Pro-Sys Consultants Ltd. v. Microsoft is part of a trilogy of landmark cases, which also includes Sun-Rype Prods. Ltd. v. Archer Daniels Midland Co., 2013 SCC 58 (Can.) and Infineon Technologies AG v. Option consommateurs, 2013 SCC 59 (Can.)., where the Supreme Court of Canada decided in favor of the Plaintiffs, authorizing indirect purchasers to file antitrust class action lawsuits.
The Plaintiffs alleged Microsoft engaged in various acts, beginning in the late 1980s and continuing beyond the turn of this century, to monopolize the PC operating system, word processor, and spreadsheet markets. The resulting monopolies allowed Microsoft to impose overcharges on Canadian purchasers of Microsoft software that would not have obtained absent the anticompetitive behavior. While many of the core allegations mirrored those previously made in numerous class actions in the United States, the Canadian action covered damages suffered over the period December 1998 to March 2010. The damages periods in the U.S. cases ended considerably earlier, prior to the introduction of smart phones and growing use of web-based office applications like Google Docs. This presented significant new issues for liability, causation, and damages analysis.
applEcon’s experts, Dr. Janet Netz and Dr. Jeffrey MacKie-Mason, played essential roles throughout the litigation. Dr. Netz filed affidavits in support of class certification in 2007, later becoming the Plaintiffs’ expert on the relevance to Canadian indirect purchasers of damages methods used to calculate Microsoft’s damage to American indirect purchasers. Dr. Netz opined that the three methodologies used to calculate damages in the U.S. Microsoft cases, the price premium, rate of return, and profit margin methods, were equally applicable to, and could be implemented in, Canada. She was cited to repeatedly in the ruling by the Supreme Court of Canada. Dr. MacKie-Mason was the Plaintiffs’ causation expert. applEcon also provided supplemental support for liability expert Dr. Rick Warren-Boulton and damages expert Dr. James Brander, who applied variations on Dr. Netz’s rate of return and margin methods to Canadian data.
Since 2003, applEcon has provided key economic expertise and expert support in eight indirect purchaser class actions that have resulted in $1.86 billion of recovery to indirect purchasers of Microsoft software in the U.S. (AZ, CA, IA, MA, MN, NM, and WI) and CAD $517 million of recovery to indirect purchasers of Microsoft software in Canada.
For further information in the Pro-Sys Consultants Ltd. v. Microsoft case, see:
Pro-Sys Consultants Ltd. v. Microsoft Class Website, CFM, 18 September 2018
“Microsoft Software Class Actions – Canada Notice to Class Members”, Microsoft Canada, 18 September 2018
Full Case Name: Pro-Sys Consultants Ltd. and Neil Godfrey v. Microsoft Corporation and Microsoft Canada Co.
Year: October 31, 2013
Case Number: 34282