Out-Law / Your Daily Need-To-Know

A federal judge on Friday rejected Microsoft's proposal that it should settle a raft of more than 100 private lawsuits by making a donation to schools of software and refurbished computers valued by the company at over $1 billion.

US District Judge J. Frederick Motz described the settlement proposal as "thinly funded" and raising "legitimate questions since it appears to provide a means for flooding a part of the kindergarten through high school market, in which Microsoft has not traditionally been the strongest player (particularly in relation to Apple), with Microsoft software and refurbished hardware." Over 40% of US schools use Apple Macintosh computers.

Judge Motz added that he agreed with critics of the proposed settlement who had argued that the donation of Microsoft software "could be viewed as constituting court-approved predatory pricing." He suggested that Microsoft should instead contribute more money for the purchase of non-Microsoft software or for the purchase of new computers.

Microsoft has said it will not appeal the ruling and will now consider whether or not to make an alternative settlement offer in the class action cases that accuse Microsoft of overcharging for its products.

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