Microsoft, Private Plaintiffs Meet

By Peter Galli  |  Posted 2001-12-18 Print this article Print

Microsoft Corp. and lawyers for the plaintiffs met before a mediator in Washington D.C. on Tuesday to try and iron out a settlement for the more than 100 private antitrust cases against the Redmond, Wash. software firm, but the talks ended without any res

Microsoft Corp. and lawyers for the plaintiffs met before a mediator in Washington D.C. on Tuesday to try and iron out a settlement for the more than 100 private antitrust cases against the Redmond, Wash. software firm, but the talks ended without any resolution. Microsoft spokesman Jim Desler said that todays meeting ended after a few hours at the request of the mediator, Ken Feinberg, due to his own outside obligations. "But the mediator requested that the parties keep the window of mediation open.
"I guess the next step is that the mediator will be talking to the judge regarding todays meeting and any other related issues," he said, adding that no date had been set for the possible resumption of mediation talks.
Desler declined to comment on the exact content of the meeting, saying this would be kept confidential. But Microsoft had "agreed to the mediators request and remained open-minded about the process," he added. Steve Benz, a partner at law firm Kellog, Huber, Hansen, Todd & Evans in Washington D.C. and co-counsel for the California plaintiffs, said the parties would be notified on Tuesday whether the mediation would continue or not. "If it does not continue we expect [Maryland Federal District Court Judge J. Frederick] Motz to rule by the end of the week on whether to approve the preliminary settlement. Thats all I can tell you as we are under a confidentiality order," he said. The private antitrust cases were brought against Microsoft last year following the ruling by U.S. District Court Judge Thomas Penfield Jackson that the Redmond, Wash., company had violated two sections of the Sherman Antitrust Act. While a proposed settlement is already on the table and parties have already argued its merits before Judge Motz, some Californian class-action lawyers have opposed the deal and have asked the Judge to strike down the settlement or allow their lawsuits to proceed separately in California. They, and other parties like Apple Computer, feel the settlement negotiated by Microsoft and the other class-action lawyers is a ploy designed to entrench the Windows monopoly while allowing the company to pay back only a tiny fraction of what it actually owes consumers. Judge Motz himself last week expressed concern about the deal, which would give the nations poorest schools computers and software estimated at $1 billion. He also expressed concern about including California in the proposed settlement and ordered the parties to meet with a mediator today to hammer out more-acceptable terms. Apple Computer, one of the harshest and most vocal critics of the proposed settlement, on Tuesday continued its broadside of the plan. CEO Steve Jobs issued a statement saying the proposed settlement compelled schools to adopt Microsoft technology and that most educators and 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 $1 billion cash penalty represents less than 3 percent of Microsofts $36 billion cash hoard," he said. But Microsofts Desler rejected this, saying national education organizations, including the National Education Association, the Council of the Great City Schools and the United Negro College Fund, had enthusiastically voiced their support for the settlement agreement. "We have been listening to the views of educators as well as competitors in the software industry, and have already refined the agreement to clarify and ensure the independence and impartiality of the education foundation established as part of the settlement," he said. Microsoft remained open-minded and was willing to listen to and discuss reasonable suggestions that were consistent with the agreements original intent of providing technology to the neediest schools, he reiterated.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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