In Face of Criticism, Microsoft Changes Offer to Settle Private Antitrust Suits

Microsoft on Monday unveiled changes to its offer to settle private antitrust lawsuits by donating reduced-price software, computers and training to schools. The changes are designed to address the criticisms of some educators and Microsoft rivals that the plan would simply encourage students to use Microsoft software and thus extend the software giant's market dominance.

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Microsoft on Monday unveiled changes to its offer to settle private antitrust lawsuits by donating reduced-price software, computers and training to schools. The changes are designed to answer criticism that the donations will extend the company’s market dominance. Microsoft lawyer Tom Burt urged U.S. District Judge J. Frederick Motz of the District of Maryland to accept the settlement, saying schools, not the software giant, would benefit from the settlement plan. He said schools would be able to make their own technology choices. “This is going to be a platform-neutral settlement that is not going to be influenced by Microsoft,” Burt argued in urging acceptance of the deal that would provide an estimated $1 billion for school donations. Among the settlement changes unveiled by Microsoft: � Changes in the way the foundation that will oversee the money will pick its board members. Microsoft said two software makers are joining the foundation: Connectix, which makes a program that lets Windows work on rival Apple computers, and education software company Key Curriculum Press. � The foundation, not Microsoft, will oversee the doling out of $90 million in teacher training funds that are also part of the settlement. The changes are designed to address the criticisms of some educators and Microsoft rivals that the plan would simply encourage students to use Microsoft software and thus extend the software giant’s market dominance. Last week, Apple told the court the settlement constitutes a massive subsidy for the adoption of Microsoft products in schools. Apple holds nearly half the pre-college educational market and analysts said that share could be threatened by the settlement. Microsoft said the settlement has the support of the National Education Association, the United Negro College Fund and other education groups. Under the proposal, Microsoft would provide at reduced prices more than $1 billion worth of Microsoft software, refurbished personal computers and other resources to more than 16,000 of the United States’ poorest schools. Burt said he hopes more companies will join the foundation and stressed that schools can make their own technology choices. “This is not a settlement that imposes any solutions on local schools,” he said. “The eligible schools are enabled to implement local technology plans.” Motz repeatedly expressed concerns about the structure of the settlement, showing fears that it might unduly benefit Microsoft. Burt called that concern “at most insignificant” and claimed that schools would be shortchanged if Microsoft simply paid a lump sum to the foundation, as Apple suggested. “The value of the software to the students is much greater than the cost to Microsoft,” Burt said. More than 200 educators, parents, technology experts and private citizens have written to the judge who is reviewing the proposal. The vast majority oppose the settlement’s terms — although many say they would welcome some sort of plan to settle the case by giving schools badly needed technology resources. “I believe Microsoft’s intent was positive and they truly believed that they had a solution that would be acceptable and useful to schools,” says Bill Fiske, the instructional technology coordinator for the Rhode Island Department of Education. “Sadly, you mix in a little bit of corporate arrogance and a misunderstanding of the educational environment and you end up with a solution that horrifies everyone.” Educators and minority-rights groups also have taken issue with Microsoft’s plan to provide schools with refurbished, used computers. Microsoft says providing less expensive computers enables the company to give schools more computers. But school administrators say refurbished computers are much costlier to maintain. The settlement effort of the private class action lawsuit comes as Microsoft continues to attempt to reach a deal with nine states seeking a remedy against the software giant for violating antitrust laws. Shares of Microsoft were off 58 cents to $67.25 in afternoon trading on the Nasdaq Stock Market. Copyright 2001 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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