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Apple Gets More Aggressive: Steve Jobs Pushes Revised Settlement For Microsoft Class Action Lawsuits

Apple Gets More Aggressive: Steve Jobs Pushes Revised Settlement For Microsoft Class Action Lawsuits

by , 2:30 PM EST, December 7th, 2001

For years, Apple has not pushed it's long-time competitor Microsoft. Since Steve Jobs declared that the platform wars were over, and that Microsoft was investing US$150 million in non-voting Apple stock, Apple has consistently shied away from any sort of inflammatory language when referring to the software monopoly. Even when it came to testifying in Microsoft's antitrust trial, it was Avie Tevanian, Apple's head software honcho, who took the stand instead of Apple's CEO, Steve Jobs. When Apple has compared its machines to Windows-based PCs, it has consistently been the hardware that was compared, and not the operating system itself. In short, Apple, being a much smaller company than Microsoft, has chosen to keep a low profile rather than risk antagonizing its chief competitor and one of its largest investors.

Today, however, that has changed somewhat. One of the spin-offs of the fact that Microsoft has been upheld by an appellate court to be an illegal monopoly was a raft of class action lawsuits spearheaded by attorneys looking to cash in on MS's legal standing. Last month, a settlement offer was announced by the litigants (the attorneys and Microsoft, not the actual plaintiffs) that would allow Microsoft to donate up to US1 billion in software, services, and hardware to some of US's poorest schools. The settlement allows Microsoft to get off scot-free while the attorneys in the case get to collect huge legal fees based on the technical size of the settlement offer. Apple has already issued statements calling the settlement unfair, but this week Steve Jobs issued a much harsher statement. Mr. Jobs is urging the settlement to move to a pure cash deal where Microsoft would donate US$1 billion in cash to existing educational charities designed to help schools get wired. From a Reuters report:

Apple Computer Inc. said on Thursday it would urge a federal judge to take cash -- not software -- from Microsoft Corp., which aims to settle a suit by giving heavily to schools, one of Apple's top markets.

Apple will file a supplemental brief with a Maryland court, which must approve a proposal that Microsoft settle suits alleging it overcharged for software by giving more than $1 billion to schools.

Software could represent more than $500 million of that total, Microsoft said, although Apple Chief Executive Steve Jobs said in a statement that the software donation was valued by Microsoft at $830 million.

"We think people should know that the actual costs to Microsoft for this donated software will likely be under $1 million," said Jobs, whose biggest shareholder at Apple is Microsoft.

Apple has already filed a list of objections to the terms of the settlement.

"We think a far better settlement is for Microsoft to give their proposed $1 billion -- in cash -- to an independent foundation, which will provide our most needy schools with the computer technology of their choice," Jobs said.

The benefit to Apple with this deal is that the money would be spent by existing channels in the educational market, instead of inserting Microsoft into a freebie position in some 14.5% of the nations schools. While much of the money might still go to Microsoft or PC vendors, Microsoft's direct hand in the choices would be removed. You can read the full article at Yahoo!'s Web site.

The Mac Observer Spin:

Hear! Hear! The proposed settlement is a sweetheart deal for Microsoft and a mockery of justice. It must be said that class action lawsuits seldom have anything to do with justice, but the settlement as put forward by Microsoft and the plaintiffs' attorneys actually rewards Microsoft for its illegal behavior. It's bad enough that the Bush Administration's US Department Of Justice has abrogated its duty to the American people, to see the company further rewarded is just too much. We can hope that the judge will listen to what Steve Jobs and many other critics have had to say about this deal.

In the meanwhile, we find it very interesting that Apple would take such an aggressive stance. Microsoft is still a very important developer for Apple, especially now that Mac OS X is here. We have little doubt, but no evidence, that a few phone calls took place between Redmond and Steve Jobs' jet before these statements were released, but we are just plain pleased to see it happen. The education market is vital to Apple's success, and the complete unlevelling of the playing field by the proposed settlement is obviously something on which Steve Jobs found important enough to make a stand.

Lastly, one of the safe aspects of the proposed settlement is the public perception of all these poor schools getting a bunch of computer stuff. Criticizing that is tough, politically, and in deed many people choose to ignore the overall picture and concentrate only on the poor-schools aspect of the settlement. Mr. Jobs' suggested revision still allows those schools to get free computer stuff while doing it properly. That's a good thing.

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