Jobs: Microsoft settlement still not good enough

As Microsoft Corp.'s lawyers once again sit down with mediators and lawyers for the plaintiffs in a class-action lawsuit today, Apple Computer Inc. CEO Steve Jobs has offered a statement reiterating his company's position.

Since November, Microsoft has had a proposal on the table to settle civil litigation in the US District Court for the District of Maryland. US District Court Judge J. Frederick Motz is presiding over the case, which consolidates several private class-action lawsuits filed against the Redmond, Wa.-based computer company.

At issue is Microsoft's proposal to donate almost a billion dollars in goods and services to underprivileged schools around the nation. Microsoft wants to give software, refurbished computers, training and technical support to up to 14,000 at-risk schools nationwide.

Microsoft's settlement proposal has drawn harsh criticism from opponents who say if it is implemented, the settlement will give Microsoft a leg up on competitors in the educational market. While Microsoft's plan doesn't call specifically for schools to buy Windows-compatible computers, critics charge that's exactly what will happen in most cases. And Microsoft doesn't deny that much of the software it plans to donate runs on Windows only, further increasing the likelihood that administrators will choose Windows-equipped PCs for their schools over Macintoshes or other computers. Critics also charged that Microsoft's original settlement would give the company too much control over how funds, systems and software were distributed to schools.

Apple has been one of the proposal's most outspoken critics -- Apple doesn't want to see Microsoft encroach a market where Apple still maintains a healthy share. In recent briefs filed with the court, Apple has questioned Microsoft's stated value of its settlement and suggested that Microsoft put up a cash settlement that could then be disbursed through an independent foundation not under Microsoft's control. Apple has also suggested that any plan to purchase refurbished computers is riddled with hidden costs and other pitfalls that reduce the systems' usefulness.

Following the filing of Apple's supplemental brief, Microsoft amended the terms of its settlement to provide for more independent oversight, although the amounts of cash and software were not altered.

From Steve Jobs' perspective, Microsoft's alterations don't do much to answer Apple's complaints about the settlement proposal.

"Microsoft's proposed settlement compels schools to adopt Microsoft technology. Most educators, along with Apple, think this is simply wrong. Any settlement must guarantee that schools have the freedom to choose, and this requires that Microsoft pay their penalty in cash, not donated Microsoft software which will cost them only pennies on the dollar. A US$1 billion cash penalty represents less than 3 percent of Microsoft's $36 billion cash hoard," said Jobs.

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Peter Cohen

PC World
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