Microsoft faces local government claims over Windows pricing

The action follows the settlement of a class action brought on behalf of California consumers in January 2003.

That settlement gave 13 million Californian residents, who bought Microsoft Windows operating system, spreadsheet or word processing software between 18th February 1995 and 15th December 2001, the right to claim a share of up to £1.1 billion in computer vouchers.

The settlement did not entitle local government bodies to any relief for money spent on the same products in the same period.

"When it became clear that governmental entities were going to be excluded from the consumer class action, it was incumbent on all of us to do whatever possible to protect our various municipalities," Dennis Herrera, San Francisco's city attorney, told reporters.

Five California counties - San Francisco, Santa Clara, San Mateo, Contra Costa and Los Angeles - together with the cities of Los Angeles and San Francisco have now sued the software giant.

The antitrust filing, which is along the lines of the earlier consumer suit, seeks to make the suit a class action, allowing all government bodies within the state to participate.

It comes at a time when Microsoft has settled a string of state consumer class actions, together with antitrust suits brought by the US Government and rival software makers such as AOL and Sun MicroSystems.

"We value our relationship with these cities and are grateful for the opportunity to provide them with software at very reasonable prices," said Microsoft spokeswoman, Stacy Drake.

She refused to comment further until company lawyers had seen the filing.