Seagate has agreed to settle a class action lawsuit by offering customers from the past six years a cash refund or free back-up and recovery software.
The suit was filed by Michael Lazar and Sarah Cho in March 2005 following claims that the actual storage capacity of Seagate's hard drives was seven per cent less than promised.
In particular, the plaintiffs alleged that Seagate mislead consumers by using the decimal definition of 'gigabyte' in which one gigabyte equals one billion bytes.
Computer operating systems calculate hard drive capacity using the binary definition of gigabyte, in which one gigabyte equates to 1,073,741,824 bytes, creating the seven per cent discrepancy.
A hearing has been scheduled in the San Francisco Superior Court to approve the settlement.
The suit states that anyone in the US who purchased a new Seagate hard drive from an authorised Seagate retailer or distributor between 22 March 2001 and 26 September 2007 is entitled to claim on the settlement.