Microsoft and IBM Reach a $775 Million Settlement

Microsoft announced that it has settled its antitrust dispute with IBM for $775 million, and a $75 million credit extension toward deployment of Microsoft software at IBM.

“With these antitrust issues behind us, both Microsoft and IBM can move ahead, at times cooperatively and at times competitively, to bring the best products and services to customers,” said Brad Smith, general counsel and senior vice president, Microsoft. “Over the last few years we have been focused on resolving our disputes with other companies, and today’s announcement takes another significant step towards achieving that goal.”

The settlement resolves claims arising from the United States v. Microsoft antitrust case in the mid-1990s, where IBM was identified in U.S. District Judge Thomas Penfield Jackson’s findings of fact as having been impacted in its business by certain Microsoft practices. Bloomberg News reports:

Microsoft in the past year has wrapped up legal disputes to allow the company to focus more on bolstering sales growth and improving the security of its Windows software. Microsoft last year paid Sun Microsystems Inc. $1.6 billion to end a 10-year feud, in March agreed to pay $60 million to settle a patent and antitrust dispute with Burst.com. Inc. and in April decided to pay Gateway Inc. $150 million in end a case similar to IBM’s.

“There’s a settlement and there’s not much more to say,” IBM spokesman Scott Brooks said. “It resolves some of the long- standing issues and we are pleased we were able to reach this settlement. We have been working on this resolution for the past two months.”

According to a press release, in addition to addressing all discriminatory pricing and overcharge claims based on the findings in the U.S. antitrust case, the settlement resolves all antitrust claims, including claims related to the IBM OS/2 operating system and SmartSuite products, with the exception of claims for harm to IBM’s server hardware and server software businesses.

IBM agreed that it won’t assert any claims for server monetary damages for two years and won’t try to recover damages on such claims from before June 30, 2002.

“IBM is pleased that we have amicably resolved these long standing issues,” said Ed Lineen, senior vice president and general counsel, IBM.

Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.