New York Times Looks At Microsoft California Settlement, Apple In Education

The New York Times published today an in-depth look at a topic we have brought to you before, that of the Microsoft private antitrust settlement in the state of California. The Timesi coverage, however, offers a deeper look than previous coverage of the issue.

At issue is an aspect of the US$1 billion dollar settlement that would take 2/3 of all unclaimed money in the settlement -- which offers vouchers to consumers who claim to have overpaid for Microsoft products -- and give it to Californiais "poorest schools" in the form of software and hardware. Apple has protested the settlement, saying that it would take what is supposed to be a punishment for Microsoft and turn it into an opportunity for the company to extend its foothold in the education sector. From the NY Times article (as republished in the Kansas City Star):

"We understand there may be concerns," said Jim Desler, a Microsoft spokesman, "and weire open to ways we can address them within the structure of what we think is a competitively neutral agreement."

A year ago Apple opposed a similar proposed settlement that would have ended more than 100 private class-action lawsuits against Microsoft around the country. In that deal, Microsoft would have given $1 billion in money, software, services and training to about 12,500 public schools, as well as Windows licenses and refurbished PCs. A federal judge threw out the settlement, saying it could adversely affect competition.

The judge, J. Frederick Motz of the U.S. District Court in Baltimore, wrote in his ruling that the proposed settlement appeared to provide "a means for flooding part of the kindergarten-through-high-school market -- in which Microsoft has not traditionally been the strongest player, particularly in relation to Apple -- with Microsoft software and refurbished PCs."

Despite such snags, tying legal settlements to donations of products and services is becoming increasingly common in the computer industry, according to David Daoud, an analyst with the research house IDC.

The most notable of example was the settlement of a class action suit that had accused Toshiba of using defective chips in the control disk drives of its laptops, possibly causing data to be corrupted or lost. The $2.1 billion settlement, reached in 1999, included the establishment of a nonprofit organization to distribute $350 million of the settlementis proceeds to low-income schools.

There isnit a whole lot that is new in this article, but it does bring a lot of information together. If you arenit familiar with the situation, it is a particularly good read. Other topics discussed include Appleis shrinking market share in the education sector, Dellis growth in the same area, a look at a school system in Ohio who dropped Apple for all the wrong reasons (thatis our opinion, and is not expressed in the NY Times article), and other historical factors.