Selected Cases

Pro-Sys Consultants Ltd. v. Microsoft Corporation

In a widely publicized ruling, the Court of Appeal for British Columbia, Canada, decided in favor of Analysis Group client Microsoft Corporation, reversing class certification in an antitrust action involving indirect purchasers of Microsoft software products.

In Pro-Sys Consultants Ltd. v. Microsoft Corporation, a putative class of retail buyers of computers equipped with Microsoft applications and operating systems alleged that Microsoft together with manufacturers tried to exclude competition and raise prices. The plaintiffs also alleged that overcharges at the OEM level were being passed on to them, and sought restitution.

Blake, Cassels & Graydon LLP, the law firm representing Microsoft, retained a team from Analysis Group to provide industry analysis, rebuttal of multiple opposing expert witnesses, and general support to counsel. President and CEO Martha Samuelson, Managing Principal Alan White, Principals Almudena Arcelus and Elizabeth Eccher, Vice President Samuel Weglein, and Manager Kristina S. Shampanier supported several Analysis Group affiliates, including R. Glenn Hubbard, the Dean of Columbia Business School, who demonstrated the shortcomings of the plaintiffs’ proposed damages models, and economist Catherine Morrison Paul. The team also supported Ron Giammarino, the Phillips, Hager and North Professor of Corporate Finance at the University of British Columbia’s Sauder School of Business.

Among the issues in question were whether the plaintiffs had a course of action based on their claims that costs were being passed on. According to Justice P.D. Lowry, one of three judges on a panel hearing the case: “… in the absence of the passing-on defence, a defendant would be liable for both the whole of the charge passed on (liability to the direct purchasers) and for all or any portion of the charge passed on (liability to the indirect purchasers) … [that] would result in double recovery … which our law does not permit.”

Citing legal precedents in both the U.S. and Canada, including Kingstreet Investments Ltd. v. New Brunswick (Finance) and Illinois Brick Co. v. Illinois, the judges dismissed the plaintiffs’ action and set aside the earlier class certification order received.