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October 15, 2007

Supremes won’t help Microsoft and Best Buy with RICO lawsuit

Posted by David Hunter at 2:14 PM ET.

Back in May, the US Ninth District Court of Appeals ruled that Microsoft and Best Buy could be sued under US racketeering law over a marketing program where customers who bought PCs at Best Buy were allegedly signed up for the MSN ISP service without their knowledge. Microsoft and Best Buy contended that this use of the Racketeer Influenced and Corrupt Organizations Act (RICO) was incorrect, but today the US Supreme Court refused to review the lower court decision.

Aside from the distasteful publicity of being accused of organized crime, RICO suits allow plaintiffs to be awarded treble damages which triples the attractiveness to personal injury lawyers. The US Chamber of Commerce weighed in on Microsoft and Best Buy’s side saying that such RICO lawsuits had gotten out of hand:

In its filing, the Chamber said civil RICO “is becoming one of the most frequent and damaging devices used against businesses.” Over 4,500 RICO cases have been filed since 2001, the Chamber said, with only 35 of those filed by the government.

Now this case gets tried back in the lower court if Microsoft and Best Buy don’t get out their wallets to settle it.

Filed under Best Buy, Coopetition, General Business, Legal, Marketing, Microsoft, Public Relations

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