Microsoft tentatively agreed to pay $70 million in vouchers to several California municipalities to settle an antitrust claim that it used its market dominance to overcharge government customers, plaintiff lawyers said on Tuesday. The class action suit was filed in August 2004 by the cities of San Francisco and Los Angeles and the counties of Santa Clara, San Mateo, Los Angeles and Contra Costa. The agreement is still pending court approval.

Microsoft said it sold software at fair and reasonable prices and denied that it overcharged customers, but said it agreed to settle the case so it could focus on the future.

The $70 million in vouchers would be divided among California state and local government entities that can use them for cash refunds on computer hardware and software.