Computer companies are on notice after the world's largest hard drive manufacturer, Seagate, reached an out of court settlement, after claims it had misled consumers regarding storage capacity.
The class action, filed in a California court, claimed Seagate wrongly defined one kilobyte as one thousand bytes, not 1,024 bytes, which is regarded as the industry standard.
This results in a hard drive labelled as 1GB, actually being 73,741,824 bytes, almost 70MB, short of the mark.
As compensation to its customers, Seagate is offering US customers a five per cent refund on drives bought during the last six years or free backup software. The compensation does not apply to customers outside of the US.
"Seagate is pleased to have reached a settlement of the litigation," Seagate spokesperson Woody Monroy said.
"Seagate believes that its advertising and other business practices were, and are proper in all respects. However, because of the expense and burden of litigation, Seagate believes that resolving the matter through settlement is in the best interests of Seagate and its customers."
Under the terms of the settlement, Seagate will label its products with disclosures regarding the storage capacity of its hard drives, and will pay court costs of $US1.75 million ($A1.91 million).
In 2003, a group of users began a class action against Apple, Dell, Gateway, HP, IBM, Sharp, Sony and Toshiba, which has not yet been resolved.
A similar case against flash memory card makers SanDisk and Kingston is also in the courts.
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