Jobs Sounds Off on Microsoft Settlement

The Senate Judiciary Committee has weighed in on the proposed antitrust case settlement between Microsoft Corp. and the federal government, and has scheduled a hearing for Dec. 12 to examine the credibility of the proposal.

The committee will hear testimony from the Justice Department, attorneys general in favor and opposition to the settlement as well as a Microsoft executive or lawyer.

A Microsoft spokesman did not have any immediate comment on the hearing.

Its just one facet of a busy legal month for Microsoft. On Dec. 7, the nine states that opposed the settlement and the District of Columbia will file their proposal for a final judgment and a witness list to Washington D.C. District Judge Kathleen Kollar-Kotelly.

In addition, Microsoft lawyers have to be back in court before Maryland District Court Judge J. Frederick Motz on Dec. 10 to present their case regarding the proposed settlement of more than 100 private antitrust cases against the Redmond, Wash. software maker.

Earlier this week, Motz heard evidence for and against the proposed settlement of more than 100 private antitrust cases against Microsoft Corp.

The public hearing, held at the U.S. District Court for the District of Maryland in Baltimore, went on well into the evening and no decision was expected immediately.

Microsoft spokesman Jim Dessler said that the court had heard powerful testimony over the day offering evidence why the proposed settlement was appropriate.

“The Judge has indicated he will continue to accept comments after today and will decide by mid-December whether or not to give preliminary approval for the proposed settlement,” he said.

The proposal calls for Microsoft to donate more than $1 billion in software, reconditioned computers, services and training to thousands of schools in the United States.

But opponents of the deal say it doesnt go far enough to compensate everyone named in the class-action suits, and they allege that it doesnt punish Microsoft at all—instead giving the software firm a leg-up into the lucrative educational market.

Apple Computer, which claims that half of the computers in education today are its computers, filed a 30-page brief opposing the proposed agreement. “We are baffled that a settlement imposed against Microsoft for breaking the law should allow, even encourage, them to unfairly make inroads into education–one of the few markets left where they dont have monopoly power,” Apple CEO Steve Jobs said in a prepared statement.

He is not alone in this view. Ed Black, the president of the Computer & Communications Industry Association, also filed a letter with Judge Motz in which he said the court-ordered distribution of free Microsoft software would be “tantamount to judicially sanctioned predatory pricing by a monopolist in a critical market.”

Microsoft had come to dominate many of the most critical software markets largely through the use of illegal, anticompetitive tactics, he said, adding that it had faced some competition in the market for client operating systems – most notably from Apple in the education sector.

“Access to this market is considered key to attracting and retaining users for future sales. By allowing Microsoft to flood the education market with free software – at virtually no cost to the company – the court will be virtually assuring that no other competitor will be able to charge for its products. The foreclosure of this market to competition and consumer choice will only facilitate the continuation of Microsofts unlawful monopolistic strategy,” Black said in his letter.

But Microsofts Desler said he “respectfully disagreed” with the assessments by Apple and others since the proposed settlement was platform neutral and certain of its provisions expressly addressed these concerns. “The deal is structured in such a way that the schools will decide what is best for them,” he said.