Judge Questions Structure Of MS Class Action Settlement Proposal, Cites Possible Harm To Apple

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On Friday, we reported that Appleis CEO, Steve Jobs, had harshly criticized a proposed settlement in Microsoftis class action lawsuits. That settlement calls for Microsoft to donate up to US$1 billion in software, services, and used computers to the nations poorest schools. Criticism has mounted that instead of punishing Microsoft for abusing its monopoly power, it gives them a leg up in the education market which will only further harm competition in that market. Steve Jobs issued a statement last week that echoed this sentiment and called for a revision to the settlement that has Microsoft pushing US$1 billion in cash to existing non-profit organizations that could then spend the money as they see fit. This would mean that companies other than Microsoft would likely be the recipient of some of this money while still offering a great service to those poor school districts.

In a refreshing break from the recent series of inexplicable judicial decisions in such areas as free speech and the Internet, the judge overseeing the class action lawsuit with Microsoft questioned the proposed settlement himself. From a Reuters report:

U.S. District Judge J. Frederick Motz appeared to share concerns raised by Apple that the agreement would flood schools with refurbished personal computers running Microsoftis Windowis operating system and other software.

"If in the solution there are structural biases, however good the intention, then thatis something thatis got to be of concern," Motz said.

Motz asked Microsoft why it just did not distribute the money and let schools spend it on whatever software they liked.

But Microsoft Deputy General Counsel Tom Burt said the software giant could help more schools under the proposed settlement, distributing more software at a lower cost than if the same schools went out and bought programs on the open market.

In later remarks, Motz expressed some sympathy for Microsoftis explanation, saying that the potential harm to competition had to be weighed against the settlement providing "more bang for the buck" than just handing out cash.

Microsoftis Burt accused Apple of trying to take Microsoftis settlement money and get it spent on Apple products. "Microsoft believes this settlement fully maximizes the value of this case," he said.

There is more information in the short article from Reuters.

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