Microsoft offers to help schools as part of settlement

Wednesday, November 21, 2001

SEATTLE -- Microsoft said Tuesday that it will give thousands of the nation's poorest schools more than $1 billion in cash and services to settle dozens of private class-action antitrust lawsuits.

The proposed settlement would pay for teacher training, technical support, refurbished computers and copies of Microsoft's most popular software, such as Windows and Office. The company said the material would be disbursed over five years at more than 12,500 schools serving 7 million children.

Microsoft chief executive Steve Ballmer said the settlement would avoid a long, expensive court fight while helping "some of the most disadvantaged students in the country."

Critics of the plan, including some plaintiffs' lawyers, said it did nothing to punish Microsoft. One called it "pathetic."

The software giant would admit no wrongdoing under the settlement, which must be approved by U.S. District Judge J. Frederick Motz in Baltimore. A hearing was scheduled for Nov. 27.

Cases consolidated

The private lawsuits allege that Microsoft abused its monopoly power in the software market and overcharged millions of computer buyers. Most of the suits were filed after the government filed its landmark antitrust suit against the software company in 1998.

Many suits were dismissed because new computer buyers did not buy the Windows operating system directly. The remaining cases were consolidated under Motz.

Microsoft has settled its antitrust case with the federal government and nine of the 18 states that sued the company. The remaining nine states are scheduled to tell a judge next month how the company should be punished for hurting competition.

Attorney Michael Hausfeld, who represents plaintiffs in Washington, D.C., said he had the novel settlement idea about nine months ago. He said he realized each of the 65 million computer buyers eligible to gain from the settlement would likely receive only about $10 if they won the case or a settlement were reached. Hausfeld and other lawyers consulted with academics and other education experts, then worked with Microsoft on the agreement.

Hausfeld and Microsoft conceded that some lawyers, including several representing plaintiffs in California, oppose the deal.

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