California Takes Issue With Microsoft Settlement Idea

Deepfoo writes: "Note from CNet on the California challenge to Microsoft's attempt to settle the 100 civil cases on file against it by donating equipment. The dissenters will argue that those harmed in the lawsuit aren't getting compensated directly in this way, and that the ploy of donating equipment to schools is a transparent effort to further extend its monopoly. The dissenting California lawyers estimate the actual damages due to Californians alone could be on the order of 3 to 9 billion (wide range, but that's what they've said). Is Microsoft a do-gooder, or up to no good?"

Comments

please fix url

[theantix]

should be http://news.cnet.com/news/0-1003-200-7978672.html

What would be nice...

[Cpyder]

is that California would ask Microsoft to take the approach RedHat suggested. (In short: MS buys the hardware and RedHat gives away the soft)

RedHat's take

[mughi]

I think it's quite interesting that under RedHat's proposal (where Microsoft puts all that money to hardware, and RedHat gives all the software for free) that was mentioned here the other day things change the settlement from giving 200,000 computers to giving over a million.

That alone should make one pause at the "stink test". At the very least it should point out the valuation of Microsoft's software in their proposal.

Re:RedHat's take

[Scutter]

As much as I like and respect the power of computers, it occurs to me that there are a number of higher priorities for schools, especially poor ones. How about books that aren't 25 years out of date? How about hot lunches for kids who can't afford to eat? How about pencils and other supplies? How about furnaces and boilers that actually work? How about kicking in a subsidy to help pay teachers what they're worth instead of keeping them at the poverty level?

Microsoft and RedHat will continue to play their little P.R. power games, using our schools as pawns. But each time I hear a story like this, I lose a little more respect for each of them.

In Other News..

[jonfromspace]

Firestone announces it will be donating surplus "Wilderness XT" tires to Afghanistan's Northern Alliance, as well as any Goodyear employee involved in R&D or Marketing.

I'm doing it for honey!

[sabinm]

It's just like going shopping for your wife and getting her a digital camera beacuse *she really needs it* and you end up using it all the time. The gift, or the donation is really for you. Only you benefit for it.

I find it hard to believe that donating a bunch of windows software and hardware to communities on a limited basis is going to resurrect the BeOS, put Sun back on the line as the company of the internet or put money into developing better products for less money for billions of people. This think of the children ploy is as transparent as those "feed the children in 3rd world country" foundations. Most of the money goes to to the Not for profit administrator and a scant few cents actually makes it past the us border.

what a joke

Userfriendly

[Pstrobus]

has already covered this topic fairly well here

"sir, we're a monopoly, we get to set the price"

Not to mention that education is the last Mac stronghold. I just wonder what'll happen in five years when the 'free stuff' runs out. Will MS continue to provide low cost solutions? Didn't think so.

Drug dealers always like to give out free samples

Amazing

[moz711]

I'm still amazed at the pair of brass balls needed to even suggest a settlement like this.
Can you think of any other company that would see flooding the market with their product as a good solution to a monopoly lawsuit? If AT&T had suggested adding free phone lines to schools in reponse to the goverment saying they already had too much control, they would have been laughed out of the court room.

A vile strategy

[nsample]

I'm a Windows user at home, a Solaris user at the University, and about the farthest thing from a linux zealot that there is. I can't say that I have much passion about my OSes. It's just not something I can get riled up about.

However, this decision sets a new standard for abuse and irony. My wife's a worker's compensation attorney, so I get stories of liars and shenanigans in courts every day. It's never anything close to this, however.

The settlement is supposed to punish Microsoft for abusive practices, but actually rewards them greatly:

1. No real cash payment - they "charge themselves" for software, rather than paying penalties. win.

2. Cash from the US government - that same self-charge comes as a business expense and a loss against an MS business division, thus it is treated as a TAX WRITE-OFF. The write-off value is far greater than the charge, thus they MAKE money on balance.

3. The schools - Schools are one place alternatives still ahve penetration. (They used to be the bastion of Apple...)

4. The children - Lo', the children! In the silliest irony of all, the sacrifice one monopoly for bringing MS products to the schools. These guys make Big Tobacco look good.

5. Perception - The public will see this as an overture to help those same children, thus improving the MS image.

In the end, Microsoft wins at every turn. How could this settlement possibly have come about? There is literally no aspect of punishment at all. Microsoft even makes money on the deal.

This is a sad day for our courts.

Re:A vile strategy

[Rothfuss]

I agree with Mr. Ample.

In addition:

Microsoft said it would take a $550 million charge before taxes against earnings in the current fiscal quarter if the court approves the pact.

So the company also counts this as a loss from earnings, despite the fact that it is softmoney, resulting in stock holders getting less earnings per share for the quarter. I suspect in response the stockholders will file a class action suit against MS for earnings shortcomings in an ironic display of legal recursion.

-Rothfuss

Re:A vile strategy

[RobertEwing]

These guys make Big Tobacco look good.

OK, I don't often post here, but sometimes I see something so egregious it just annoys me...

Slashdot is the home of the big-bad MS bashing, but worse than Big Tobacco? These guys deliberately withheld information that showed smoking was addictive and killed people. What's MS done? At worst played fairly dirty when competing, and trying to achieve a monopoly. Hardly a fair comparison here.

Now I agree the settlement is pretty silly, mainly because it doesn't cost MS very much at all. Personally I think even the Red Hat solution is poor. After all, they're saying that these poor schools just don't know how to spend the money, so we'll pick for them. Wouldn't a better solution be to just give the money directly to the schools in question so they can spend it where it's needed? There's not much point providing computers to schools if the literacy standards are too low, for instance.

Re:Carnegie Libraries

[EisPick]

I heard somewhere that Carnegie used to do the same thing ...

There is at least one big difference here. Carnegie didn't build libraries to settle an anti-trust lawsuit. No judge compelled him to be a philanthropist. And it was Carnegie personally giving money for the libraries, not the steel trust.

No matter what you may think of Carnegie and they way he acquired his wealth, you must acknowledge that he gave away almost all his money before he died, and that he did it because he thought it was the right thing to do.

And I'm not saying Gates hasn't begun philanthropy on the same scale. It's a bit too early to judge that.

Let's just make sure we don't confuse Gates' (and Ballmer's and Allen's, etc.) own personal philanthropy with Microsoft Inc.'s brazen attempt to disguise a marketing ploy as a philanthropic endeavor.

Not much of a punishment if you ask me

[foqn1bo]

Typically(as I understand it) in a lawsuit the whole idea is restitution of damages. I love the idea of Microsoft giving technology to underprivilaged schools, and if they want to do it then full steam ahead. But... their donation of resources shouldn't have any bearing on the actual civil litigation going on.
Companies donate money and services to charity all the time. In marketing that's called PR. Make the rest of the world think that you're allright. I'm from Southern California and I remember that when the Indian Gaming tribes went under fire during Proposition 5, they were donating money to charities left and right. Still do as a matter of fact.

Does anyone *really* think that the poor school districts are the ones who were hurt by Microsoft's Monopolistic(tm) practices? No, of course not. They wouldn't have been buying computers either way, it's the hardware that's too expensive for them--not Microsoft's inflated prices and crappy software. So after years of bullshit the average consumer has put up with by dealing with Microsoft's business tactics, as a settlement we get a company donating to an unrelated charity. Well, sign me up Frank.

There isn't any need to debate whether this sort of thing is going to extend Microsoft's monopoly or not. They do that kind of stuff all the time. It's the fact that people are willing to accept it as a term of a lawsuit settlement that pisses me off. Give'm hell boys.

Re:I think...

[TomServo]

It's not really all that different, except for what is, in my mind, a pretty major factor.

Apple and Sun weren't doing this as part of a supposed "punishment". Apple and Sun did this for a competitive advantage, but they were in a position where they should try to do that. Giving Microsoft an opportunity for a competitive advantage somehow just doesn't seem like punishment to me.

i volunteer at a school

[BlueboyX]

I do volunteer work in several elementary schools in a middle-of-nowhere city. I have worked in about a half dozen schools now, and the best one at fighting illiteracy is the one with the most computers (that are actually used). The majority of the computers in this school are all rather old, many of them running on ancient macs or win3.1 machines. However, they are well used in the 'Accelerated Reader' program. I have seen this program make a sharp difference in the children's willingness to actually pick up a book with this program. Getting a child willing to read is a big part of fighting illiteracy. This isn't someone else's rhetoric I am regurgitating; I have seen this myself.

Then I have seen other schools where the 'Clinton computers' just get stuck in a corner and get occasional use from teachers and teachers' aids only. That sure helps...

Ironically, the other schools in this area get more funding than this one because they have a higher percentage of low-income students (90% is the average, the one I am praising has 'only' 30-60%). However, the extra money doesn't seem to be well spent. Just throwing money at the problem doesn't even make a dent. All of the problems you listed will not be affected at all by putting more money in the system; it all depends on how the local government apportions it and handles it. For example, it doesn't matter if $X of extra money gets apportioned to schools if it takes > 6 months to get anything approved. 'Need a new boiler? No problem! You just have to call a long list of people and then wait another 6 months and hope for no additional delays. Yes, you will get that new boiler; it is guaranteed by law... just not when you get it.' This is the real trouble I have been dealing with.

So what we really need are local responsive governments (including school boards), sane teachers (You wont believe some of the oddities I have seen; Well, maybe you might. Your childhood memories probably weren't exaggerated...) and good school equipment that actually gets incorporated into the curriculum. Meet these three needs, and our schools will actually be pretty good despite other problems. As long as these needs aren't met, throwing money or books at the problem won't cause much change at all.

Why Some States are Going Along

[ProfDumb]

IANAL, but . . .

In most states, only "direct consumers" can sue for anti-trust damages -- e.g. typically this means Dell or Compaq, not the end-user. The suits involving these states are going to get thrown out anyway, so they are willing to settle for anything .

In CA (and some other places), indirect consumers can sue. So these states don't want to give in. But, MS cleverly made the settlement contingent on all suits being settled.

The class-action lawyers for the consumers in states that can't really sue are trying to force this settlement down the throats of the other groups. What will the judge say? Who knows.

Re:Good or bad? Not the issue.

[Alpha State]

I hate to be objective when it comes to Microsoft, but I'm afraid that they do not have good or evil motives. They simply want to turn a profit and they will attempt to alter circumstances in whatever ways allow them to produce the maximum profit. On the short term their actions may sometimes seem contradictory to this purpose, however it is their long term goal.

Complete nonsense. By this argument someone who makes his money by killing and robbing is not evil - he's just trying to make a living like everyone else. The notion that corporations should be outside ethics and moral considerations is ridiculous.

Can we all play?

[Ms.Taken]

If this works, maybe I'll try it myself next April:

"Dear IRS, Instead of a check, enclosed please find 800 copies of my latest shareware valued at $40.00 each. I'm sure you'll agree that the benefit to society of making my software available to hundreds of schools serving hundreds of thousands of children far outweighs some petty cash payment."

I could save a fortune this way. Go Microsoft!

Re:Who's been harmed

[zulux]

My personal opinion is that much of the Microsoft bashing goes on for a few reasons:

We bash Microsoft because most of us are computing professionals. I'm sure a lot of McDonald's bashing goes on in kitchens, and a lot of KIA bashing goes on in garages.