Bloomberg: Apple & Microsoft In Talks Concerning California Antitrust Settlement

Bloomberg has published a report saying that Apple and Microsoft are in talks concerning a settlement for a private antitrust lawsuit settled earlier in California. Apple was not a party to the lawsuit, but the company objected to the settlement in January because it said the settlement terms would help Microsoft extend its market share in education, and that antitrust settlements should not result in boosting a monopolistis market share.

The lawsuit was brought against Microsoft by trial attorneys on behalf of California consumers. According to the original suit, Microsoft overcharged for Windows, and was able to do so because of its monopoly status, a status that has been confirmed and upheld by US courts.

Under the terms of the settlement, consumers in California would be able to get a voucher good towards the purchase of hardware or software from any company. The vouchers would be paid for from a US$1.1 billion fund from Microsoft. Two-thirds of any money not claimed by consumers would then be donated to Californiais poorest schools for the purchase of computer-related technology, and that was the part Apple protested. According to Apple, the terms would allow Microsoft to use that aspect of the settlement to extend its presence in the education market, a claim flatly rejected by Microsoft (see our full coverage on Appleis protest for more information).

According to the Bloomberg story, Apple and Microsoft are currently in talks to find a way to overcome Appleis objections, so that the settlement can be implemented, and Microsoft can move on. From Bloomberg:

The talks indicate that Microsoft is seeking to prevent a prolonged battle to win court approval for the settlement, analysts say. Appleis complaints helped derail a proposed Microsoft settlement in 2001. By insisting the new agreement provide only cash, Apple is trying to protect its sales to schools. Microsoft says the settlement is fair.

"Microsoft would love to have this behind them so if it looks like Apple is going to stand in the way, theyill try and satisfy them," said Matt Rosoff, an analyst at market research firm Directions on Microsoft.

Microsoft and Apple have held meetings to discuss Appleis complaints, according to Microsoft and Eugene Crew, a lawyer who represents plaintiffs in the antitrust suits. The California agreement is subject to approval by a San Francisco Superior Court judge.

There is additional information in the full article from Bloomberg.