Judge Sets Class Action Suit Deadline

US District Court Judge J. Frederick Motz said yesterday that he will issue a ruling in the Microsoft class-action settlement by the end of December; hearings are scheduled for the next few weeks. As previously reported, Microsoft had reached a controversial proposed settlement with most of the more than 100 plaintiffs who launched Windows price-gouging class-action lawsuits against the company; the $1 billion settlement would require Microsoft to supply refurbished computers and software to the nation's poorest schools. Opponents of the settlement say it does nothing to address the issues the lawsuits raised, however, and instead rewards Microsoft by giving the company free reign to extend its market domination to the education market.

At the preliminary hearing yesterday, Motz gave Microsoft a December 10 hearing date, when the company can present the settlement's merits; he'll then issue a ruling by the end of December. The judge spent most of the day listening to divisive opinions about the settlement from several lawyers, including an Apple representative, who asked the judge to reject the deal. But even the lawyers representing the plaintiffs in the class-action suits are divided, with the lawyers from California refusing to endorse the settlement, stating that it doesn't go far enough to punish Microsoft. The California lawyers noted that their state has much stricter consumer-protection laws than other jurisdictions, leaving Microsoft liable for far headier damages in that state. As the arguments droned on, yesterday's hearing--scheduled to end at 2:00 P.M.--stretched into the night.

The crux of the problem is class and damages. California alleges that Microsoft overcharged consumers as much as $40 for each copy of Windows sold in that state, which could result in damages worth more than $7 billion. And the proposed settlement, the lawyers argue, doesn't address the class that brought the lawsuits in the first place--consumers. No one argues that the settlement won't help schools, but schools weren't the primary group that price gouging affected. And the settlement's $1 billion value is vastly inflated, they say, because Microsoft values each copy of Windows at full retail price, although it will cost the company only pennies for each CD-ROM it provides.

Microsoft, however, defended the deal as a good one. "Today the court saw presentations from a variety of experts in the field," a Microsoft spokesperson said after the marathon hearing finally ended. "This is an appropriate settlement that offers tremendous benefit to help empower disadvantaged communities and youth."

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