Payout of $10,000 for Windows 10 update
Microsoft has agreed to pay a Californian woman $10,000 (£7,500) after an automatic Windows 10 update left her computer unusable.
Teri Goldstein said her Windows 7 computer had automatically tried to update itself to Windows 10 without her permission.
She said the update had made her machine unstable, leaving her unable to use it to run her business.
Microsoft said it had dropped its appeal to save on legal costs.
Microsoft has been aggressively pushing the latest version of its widely used operating system, which is currently available as a free download for computers running Windows 7 and 8.
However, many people have chosen not to upgrade, because they are running old hardware, have software that does not run on Windows 10, are concerned over the software's tracking features, or simply do not want it.
In February, the company bundled Windows 10 in with its security updates and made it a "recommended update", which meant it was automatically downloaded and installed unless blocked by the user.
Some people accused the company of trying to "trick" customers into installing the update.
The Seattle Times reported that Ms Goldstein's computer had "slowed to a crawl" after the update, and Microsoft customer support had not fixed the problem.
"I had never heard of Windows 10. Nobody ever asked me if I wanted to update," she told the newspaper.