January 13, 2002	Sunday	Shawwal 28, 1422

BALTIMORE, Jan 12: A federal judge on Friday scuttled Microsoft’s proposal to donate what it said was a billion dollars worth of computer equipment and software to poor schools in settlement of a private antitrust suits filed against it.

Justice Frederick Mort sided with opponents of the deal who argued that the settlement would give Microsoft a huge advantage in the education market, one of the only computer sectors it did not already dominate. Opponents also claimed that because much of the deal was composed of Microsoft software its cost to the software giant was far less than a billion dollars.

The proposal to supply schools with refurbished computers was also seen as an unsatisfactory way of improving their technology.

In his 19-page ruling, Motz said that the proposal was thinly funded and would have given Microsoft an edge over its rivals in the market for school computers. It “raises legitimate questions since it appears to provide a means for flooding a part of the kindergarten through high school market, in which Microsoft has not traditionally been the strongest player (particularly in relation to Apple), with Microsoft software and refurbished software,” the judge said.

Motz said he agreed with critics of the deal who argued that the donation of free Microsoft software in the settlement agreement “could be viewed as constituting court-approved predatory pricing.”

In an initial reaction, Microsoft said the company was “disappointed that this unique opportunity to advance very significant social benefits has been blocked.”

Motz said he would have looked more favourably at the settlement if it had obliged Microsoft to donate a billion dollars in cash to fund technology programmes for poor schools which could then have decided how to allocate the funds between competing companies.

The ruling forces Microsoft to start negotiations from scratch in a bid to settle the scores of private lawsuits which target the company for damages because of its violations of antitrust law.

The Justice Department has settled the governments case against Microsoft in a much criticized move, but nine US states are still holding out for a better deal.—dpa