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Judge questions private Microsoft suits settlement
A judge on Monday questioned a proposed settlement of private antitrust suits against Microsoft Corp, raising doubts about its dollar value and wondering if it favoured the software giant over rival Apple Computer Inc.
A judge on Monday questioned a proposed settlement of private antitrust suits against Microsoft Corp, raising doubts about its dollar value and wondering if it favoured the software giant over rival Apple Computer Inc.
Microsoft and most of the class-action attorneys in the case are in favour of a deal that would require the company to spend hundreds of millions of dollars to put software and computers into some of the poorest US schools.
But US District Judge J Frederick Motz said he may not count the value of donated software in determining the value of the settlement and he may subtract the value of goodwill the settlement generates for Microsoft.
"If Microsoft is generating goodwill out of this, it should put more into this," Motz told Robert Hall, an economist testifying in favour of the settlement on Microsoft's behalf.
Critics of the settlement say it helps Microsoft make further inroads into the school market where Apple has traditionally been strong.
Motz also told attorneys it may be too soon for a nationwide settlement of the class action cases and that it might be better to wait.
"We just haven't had it out the way it should be had out," Motz said. "I'm not really comfortable ... that it is mature enough yet."
But Microsoft attorney David Tulchin said if the judge refused to approve a settlement now it might not be possible to resurrect the agreement later.
"Our objective here was to put an end to this litigation and not continue it," Tulchin said. "Now is the time, and this is the place."
That argument appeared to sway the judge despite the many doubts he had expressed during the day-long hearing.
"That was a very powerful argument, the judge said. "He made me rethink what I thought coming in."
Earlier on Monday, Motz appeared to share concerns raised by Apple that the agreement would flood schools with refurbished personal computers running Microsoft's Windows operating system and other software.
"If in the solution there are structural biases, however good the intention, then that's something that's got to be of concern," Motz said.
Meanwhile, some lawyers in the case say the deal is a fraction of what Microsoft owes for abusing its monopoly over personal computer operating systems and overcharging millions of people for software.
Motz asked Microsoft why it did not just distribute the money and let schools spend it on whatever software they liked.
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.
Burt accused Apple of trying to take Microsoft's settlement money and get it spent on Apple products. "Microsoft believes this settlement fully maximizes the value of this case," he said.
The preliminary hearing on the private suits settlement proposal was scheduled to be wrapped up on Tuesday Monday. Motz held a day of hearings on the settlement last month.
The private suits are separate from the over three-year-old landmark antitrust case being heard in Washington, DC, in which Microsoft agreed last month to settle with the US Justice Department and nine of the states that had joined that suit.
Another nine states have said that settlement is inadequate and proposed their own remedies in a filing last week with District Judge Colleen Kollar-Kotelly.
Bureau Report
Microsoft and most of the class-action attorneys in the case are in favour of a deal that would require the company to spend hundreds of millions of dollars to put software and computers into some of the poorest US schools.
But US District Judge J Frederick Motz said he may not count the value of donated software in determining the value of the settlement and he may subtract the value of goodwill the settlement generates for Microsoft.
"If Microsoft is generating goodwill out of this, it should put more into this," Motz told Robert Hall, an economist testifying in favour of the settlement on Microsoft's behalf.
Critics of the settlement say it helps Microsoft make further inroads into the school market where Apple has traditionally been strong.
Motz also told attorneys it may be too soon for a nationwide settlement of the class action cases and that it might be better to wait.
"We just haven't had it out the way it should be had out," Motz said. "I'm not really comfortable ... that it is mature enough yet."
But Microsoft attorney David Tulchin said if the judge refused to approve a settlement now it might not be possible to resurrect the agreement later.
"Our objective here was to put an end to this litigation and not continue it," Tulchin said. "Now is the time, and this is the place."
That argument appeared to sway the judge despite the many doubts he had expressed during the day-long hearing.
"That was a very powerful argument, the judge said. "He made me rethink what I thought coming in."
Earlier on Monday, Motz appeared to share concerns raised by Apple that the agreement would flood schools with refurbished personal computers running Microsoft's Windows operating system and other software.
"If in the solution there are structural biases, however good the intention, then that's something that's got to be of concern," Motz said.
Meanwhile, some lawyers in the case say the deal is a fraction of what Microsoft owes for abusing its monopoly over personal computer operating systems and overcharging millions of people for software.
Motz asked Microsoft why it did not just distribute the money and let schools spend it on whatever software they liked.
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.
Burt accused Apple of trying to take Microsoft's settlement money and get it spent on Apple products. "Microsoft believes this settlement fully maximizes the value of this case," he said.
The preliminary hearing on the private suits settlement proposal was scheduled to be wrapped up on Tuesday Monday. Motz held a day of hearings on the settlement last month.
The private suits are separate from the over three-year-old landmark antitrust case being heard in Washington, DC, in which Microsoft agreed last month to settle with the US Justice Department and nine of the states that had joined that suit.
Another nine states have said that settlement is inadequate and proposed their own remedies in a filing last week with District Judge Colleen Kollar-Kotelly.
Bureau Report