Microsoft Corp. on Dec. 10 announced changes to its offer to settle private antitrust lawsuits by donating reduced-price software, computers, and training to needy schools. The changes are designed to answer criticism the donations will extend the company’s market dominance into education.

Microsoft lawyer Tom Burt urged U.S. District Judge J. Frederick Motz to accept the settlement, saying schools would benefit from the settlement plan, not the software giant. He said schools would be able to make their own technology choices.

“This is going to be a platform-neutral settlement that is not going to be influenced by Microsoft,” Burt argued in urging acceptance of the deal that would provide an estimated $1 billion in school donations.

Among the settlement changes unveiled by Microsoft:

Changes in the way the foundation that would oversee the money will pick its board members. Microsoft said two software makers are joining the foundation: Connectix Inc., which makes a program that lets Windows work on rival Apple Computer Inc. computers, and education software company Key Curriculum Press.

Also, the foundation, not Microsoft, would oversee the doling out of $90 million in teacher training funds that are part of the settlement.

The changes are designed to address the criticisms of some educators and Microsoft rivals that the plan would simply encourage students to use Microsoft software and thus extend the software giant’s market dominance.

Last week, Apple told the court the settlement constitutes a massive subsidy for the adoption of Microsoft products in schools. Apple holds nearly half the pre-college educational market, and analysts said that share could be threatened by the settlement.

An Apple spokesman said the company stance has not changed, despite Microsoft’s latest concessions.

Under the proposal, Microsoft would provide at reduced prices more than $1 billion worth of Microsoft software, refurbished personal computers, and other resources to more than 16,000 of the nation’s poorest schools.

But in court documents filed with Motz, Apple Chief Executive Officer Steve Jobs argued the true cost of the settlement might be less than $1 million for Microsoft.

Burt said he hopes more companies will join the foundation and stressed that schools can make their own technology choices.

“This is not a settlement that imposes any solutions on local schools,” he said. “The eligible schools are enabled to implement local technology plans.”

More than 200 educators, parents, technology experts, and private citizens have written to the judge who is reviewing the proposal. The vast majority oppose the settlement’s terms—although many say they would welcome some sort of plan to settle the case by giving schools badly needed technology resources.

Educators and minority-rights groups also have taken issue with Microsoft’s plan to provide schools with refurbished, used computers. Microsoft says providing less-expensive computers enables the company to give schools more computers. But school administrators say refurbished computers are much costlier to maintain.

The settlement effort of the private class-action lawsuit comes as Microsoft continues to attempt to reach a deal with nine states seeking a remedy against the software giant for violating antitrust laws.


Microsoft Corp.

Responses and Opinion submitted to the court

Apple Computer Inc.