Apple hits out at settlement 'let-off' for Microsoft

Apple has objected to a tentative antitrust settlement between California and Microsoft, saying the agreement will actually benefit the software giant.

Apple's complaint largely revolves around the destiny of funds that are not claimed by individuals and businesses who qualify for rebate vouchers under the $1.1bn settlement.

Under the settlement terms, one-third of any unclaimed rebates will revert to Microsoft. The remaining amount will go to California public schools in a mix of cash and donated Microsoft software.

Such a settlement lets Microsoft off easy, according to Apple, because history shows that fewer than 25 per cent of qualifying recipients fail to claim refunds, thereby reducing the actual cost to Microsoft.

At the same time, Apple said school donations would help Microsoft expand its market share in education. Apple once led the education market, but has been surpassed by PC maker Dell.

Instead, Apple proposed that Microsoft give all unclaimed funds to schools to purchase any technology products. Under the settlement terms, individuals and businesses can use the rebates to buy any technology product from any vendor.

In a statement, Apple said: "Apple strongly believes Microsoft should make the entire pool of unclaimed voucher funds available to our schools to purchase any technology products that best meet their needs. Remember, this is a settlement imposed against Microsoft for breaking the law, and it should not allow them to unfairly compete in education - one of the few remaining markets where they don't have monopoly power."

Although the maximum value of the settlement is $1.1 billion, Microsoft could end up paying as little as $367m in cash to California public schools. If all vouchers are claimed, Microsoft pays the maximum.