Monday, 4 July 2005

Microsoft Settles Antitrust Claims with IBM

Microsoft Corp. has settled antitrust claims made by International Business Machines Corp., agreeing to pay USD 775 million to IBM. One major antitrust action remains against Microsoft Corp. by multimedia software maker RealNetworks Inc. as well as a handful of smaller disputes. The cases came in the wake of the landmark 2002 settlement by the U.S. government against Microsoft that led to subsequent agreements with several U.S. states, the European Union and other companies.

"This is a significant step toward our efforts to resolve these issues with other companies," said Brad Smith, general counsel and senior vice president at Microsoft. Under the settlement, which resolves discriminatory pricing and overcharge claims made by IBM against Microsoft, the software maker will extend USD 75 million in credit toward deployment of Microsoft software at IBM.

Smith said the agreement was reached late Thursday, the last day of the fiscal quarter. He declined to comment on how the settlement affects Microsoft's quarterly financial results, or whether monies previously set aside to pay legal claims would be tapped in this case. "We will provide information during our earnings call on July 21 about how this settlement impacts the company financially," he said. Last year, Microsoft agreed to pay USD 2 billion to Sun Microsystems Inc. In April, it paid Gateway Inc. USD 150 million. It has yet to resolve an outstanding claim by Novell Inc. tied to its WordPerfect business.