Following complaints by Apple CEO Steve Jobs, Microsoft today revealed alterations to its proposed settlement agreement with lawyers representing over 100 private class-action lawsuits, in an effort to answer some of the criticism the deal has brought.
While not altering the value of earmarked cash and software donations, Microsoft has restructured the agreement in response to accusations that it promotes the company's software over that from competitors.
Microsoft presented its altered proposal to District Court Judge J Frederick Motz at a hearing in Baltimore that started Monday morning, and is scheduled to go on. It will later feature more testimony from Apple, as well as various attorneys involved in the lawsuits.
Deal breaker The deal is separate from the settlement reached by the Department of Justice and nine states in the government's antitrust case against Microsoft. The settlement in the private class-action suits, which have been consolidated under Motz, would have Microsoft donate about $1 billion worth of software and services to disadvantaged schools.
Critics, including Apple, have charged that the deal would merely serve to expand the company's dominance in software to schools, a market Apple has so far dominated.
A Reuters report indicates that during today's hearing, Judge Motz echoed Apple's concerns about the deal, questioning whether the deal may have the effect of favouring Microsoft in the market. Voicing Apple's allegations that the deal would furnish schools with refurbished PCs running Windows, he said: "If in the solution there are structural biases, however good the intention, then that's something that's got to be of concern."
The settlement amendments presented on Monday would place the technical training aspect of the original agreement under the guidance of the independent foundation created by the settlement, according to Tom Burt, Microsoft's deputy general counsel. Burt presented the amendments in front of Motz and a full courtroom.
This change would respond to criticism that the original proposal was simply a way to get more students trained on Microsoft's software.
Foundation course The second change in the proposal would alter how the five directors of the independent foundation are chosen. With this change, the court will name the directors from a pool of nominees, with Microsoft nominating three directors, the plaintiffs nominating three directors, and a group of education associations each nominating a director. The court itself also may nominate a director.
With this change, Microsoft is looking to alter the view it would control the foundation.
Later on Monday, Apple is expected to present a plan it filed with the court Friday. In its filing, Apple asked the court to adopt a plan that calls for Microsoft to donate $1 billion in cash, instead of Microsoft software, to a private foundation that would distribute the funds to schools, which could then use the money on whatever technology they choose.