Microsoft amends private settlement deal

Microsoft on Monday revealed alterations to the proposed settlement agreement with lawyers representing more than 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 U.S. District Court Judge J. Frederick Motz at a hearing in Baltimore that started Monday morning, and is scheduled to go on and include testimony from Apple Computer Inc., as well as various attorneys involved in the lawsuits.

The deal is separate from the settlement reached by the U.S. 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 US$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 dominated.

The settlement amendments presented 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.

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 US$1 billion in cash -- in lieu 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.

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