BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Tuesday, 20 November, 2001, 20:04 GMT
Microsoft settles private lawsuits
Windows 98 software
Microsoft allegedly overcharged for software
Microsoft has settled more than 100 private anti-trust lawsuits by promising to donate more than $1bn to poor US schools.

The software giant will donate the money - in the form of software, computers and training across five years - to more than 12,500 schools.

Steve Ballmer, chief executive
Steve Ballmer: 'This is a fair and reasonable solution'
The private suits had alleged that Microsoft overcharged millions of computer buyers through abuse of its monopoly power in the software market.

"We believe this is a fair and reasonable solution that will benefit consumers, the hi-tech industry, and the overall US economy," said Microsoft's chief executive, Steve Ballmer.

"It is a settlement that avoids long and costly litigation for the company and at the same time I think it will really make a difference in the lives of some of the most disadvantaged students in the country," he added.

A company spokesman explained the money would pay for teacher training, technical support, refurbished computers and almost unlimited applications of Microsoft's most popular software, such as Windows and Office.

Seeking approval

The deal must be approved by the US District Judge J Frederick Motz in Baltimore, Maryland, before it can go ahead.


This is an innovative and visionary settlement that resolves these complex lawsuits by providing great benefits to public schools

Michael Hausfeld
Lawyer representing plaintiffs
If it is approved, the company will record a pre-tax charge of $550m for its second quarter ending in December.

A public hearing of the deal is scheduled for 27 November.

The settlement proposal was devised by one of the lawyers representing the group of private plaintiffs, Michael Hausfeld of Cohen, Milstein, Hausfeld & Toll.

Unorthodox idea

Mr Hausfeld said he thought of the idea nine months ago after working out that each of the 65 million computer buyers bringing the suits would receive as little as $10 from a $1bn settlement.

Some lawyers representing clients in California are said to oppose the idea because it does little to curtail Microsoft's anti-competitive behaviour.

"This is an innovative and visionary settlement that resolves these complex lawsuits by providing great benefits to public schools," said Mr Hausfeld.

The donation will benefit about 14% of US schools, said Cathy MacCaul, communications manager for Microsoft community affairs.

Legal problems

Earlier this month, the software giant also agreed to settle its separate three-year-old case with the Justice Department.

However, nine US states are continuing to pursue Microsoft.

The private lawsuits were brought after the government filed its anti-trust suit against the software company in 1998.

Roger Kay, an analyst with IDC, called the settlement "a huge victory" for Microsoft.

"It's amazing to me how favourable this is to Microsoft," he said.

 WATCH/LISTEN
 ON THIS STORY
Mark East, Microsoft's world education programme
"On this particular lawsuit we believe that we would have won near enough all the cases"
Peter Speigel, Financial Times in New York
"All told this is somewhere between a $1.5bn and $2bn settlement"
See also:

07 Nov 01 | Business
Q&A: What next for Microsoft?
06 Nov 01 | Business
Microsoft's future in judge's hands
05 Nov 01 | Business
New threat to Microsoft deal
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories