A federal judge has rejected Microsoft's offer to donate computers and software to schools to settle a class-action lawsuit accusing it of overcharging for its products.

U.S. District Judge J. Frederick Motz said on Jan. 11 that the settlement is "critically underfunded" and would have anticompetitive effects on the market, especially on Microsoft rival Apple Computer.

Microsoft had offered to give software, 200,000 refurbished computers, and other resources the company valued at $1 billion to the nation's poorest public schools.

Apple argued...

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