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Microsoft Appeal Rejected In Improper Charges Case

Reuters
Monday, 15 Oct 2007 | 11:32 AM ET

The Supreme Court rejected Monday an appeal by Microsoft and Best Buy of a ruling that reinstated a lawsuit by the electronics retailer's customers who claimed to have been improperly charged for Microsoft's MSN Internet service.

Microsoft
Microsoft

The justices refused to review the ruling in May by a federal appeals court in California. That court reversed a decision by a federal judge who had initially dismissed the racketeering lawsuit.

The lawsuit alleges that employees of a Best Buy unit activated a trial account for Microsoft's MSN service without the customers' consent or knowledge when the customers' purchased certain products.

The customers' debit or credit card information was transmitted to Microsoft. When the trial period ended, the customers were billed for services they were unaware they had signed up for, according to the lawsuit.

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The monthly billing continued until the customers contacted Microsoft to have the service canceled, according to the suit.

Microsoft and Best Buy have denied any illegal conduct. The two companies appealed to the Supreme Court.

Their attorneys said the appeals court was wrong to rule that a racketeering enterprise need be no more than the sum of the alleged racketeering acts. They said the law requires the enterprise be an organization with a structure separate and apart from the acts.

Second, they argued that lower courts have adopted the wrong view that a group of corporations can constitute an "association-in-fact" racketeering enterprise.

The U.S. Chamber of Commerce business group supported the companies' appeal.

It said the appeals court ruling allows a company to be held liable for triple damages under the racketeering law for conducting the affairs of a purported enterprise that is nothing more than a business agreement between two corporations.

The high court rejected the appeal without any comment or recorded dissent.

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