MSFT ruling may come Friday

January 10, 2002 Posted: 2055 GMT

WASHINGTON (Reuters) -- A federal judge could rule as early as Friday on a proposed, multimillion-dollar settlement of the class-action antitrust suits filed against Microsoft Corp., after the company failed to reach a compromise with attorneys who are trying to block the deal.

U.S. District Court Judge J. Frederick Motz is expected to hand down a decision on whether to go forward with proceedings on the settlement, despite the objections of a group of class-action attorneys from California.

Motz had agreed to wait until after 5 p.m. ET on Thursday before handing down his preliminary ruling to give the two sides time to resolve their differences out of court. But the deadline passed without agreement.

The proposed settlement would resolve more than 100 class-action antitrust cases pending against Microsoft and commit the company to spend hundreds of millions of dollars to help put software and computers into some of the poorest schools in the United States.

Class action attorneys from California have rejected the settlement and have asked Motz to exempt their state from the deal. They say the money should be reimbursed directly to customers who were overcharged for Microsoft software.

Among other things, the California class-action lawyers have complained that the nationwide settlement was negotiated without their input, even though the state has a strong case against the company.

Motz also has expressed reservations about the settlement during three days of hearings on the matter last month. On Dec. 10 he ordered the two sides into mediation in a last-ditch effort to try to find a compromise.

Microsoft (MSFT: Research, Estimates) and the settling class-action attorneys have painted the deal as a creative solution that will put computers in the hands of poor schoolchildren.

The settling attorneys told Motz the deal is a better one for consumers than trying to divvy up money among individuals. Consumers would get as little at $10 apiece if Microsoft had agreed to reimburse them directly, they said.

But the California attorneys criticized it as a legal ruse that will further the company's dominant position in the computer business and give it a leg up over Apple Computer Inc. (AAPL: down $0.34 to $20.89, Research, Estimates) in the school market.

The private suits are separate from the landmark antitrust case being heard in Washington. Microsoft agreed last month to settle that case with the U.S. Justice Department and nine of the states that had joined in the suit.

Nine other states have said that settlement is inadequate and proposed their own remedies in a filing with U.S. District Court Judge Colleen Kollar-Kotelly.