July 1, 2005 7:02 AM PDT

Microsoft settles IBM antitrust claims

Microsoft and IBM have settled outstanding legal claims stemming from the U.S. government's antitrust case against Microsoft in the mid-1990s.

The agreement, announced Friday, will result in a $775 million payment to IBM and a $75 million credit toward Microsoft software.

In the course of the U.S. Justice Department's antitrust suit against the software giant, the government claimed that IBM suffered from Microsoft's discriminatory pricing and overcharging practices, according to a Microsoft statement released Friday.

The settlement resolves those antitrust claims, as well as others related to IBM's OS/2 operating system and SmartSuite desktop application suite.

"IBM is pleased that we have amicably resolved these longstanding issues," Ed Lineen, senior vice president and general counsel for IBM, said in the statement.

The pact does not cover claims for alleged harm to IBM's server hardware or server software business.

As part of the settlement, IBM has agreed to not seek monetary damages related to server products for two years and not make server-related claims involving events prior to June 30, 2002, according to Microsoft's statement.

Microsoft has sought to resolve all of the ongoing legal processes against the company, including antitrust claims, over the past few years. In the statement, Brad Smith, Microsoft's general counsel and senior vice president, said the IBM resolution is a "significant step toward achieving that goal."

In November 2003, Microsoft and IBM entered into "tolling agreements," which extended the statute of limitations on IBM's antitrust claims against Microsoft without litigation. With those agreements set to expire in July, the companies spent the last two months devising a settlement.


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These lawsuits need to actually hurt.
$850 million can be shrugged off by Microsoft, especially considering the company is estimated to be worth 40 billion dollars. It would be great if a sizeable chunk were taken out (1/3 or higher at least), especially considering that a huge portion of Microsoft's wealth probably came from monopolizing tactics itself.

One slashdotter mentioned it would be like convicting a bank robber to give back 50% of what he/she stole!
Posted by hion2000 (115 comments )
Reply Link Flag
Not only does the money need to be proportional to the damage, but the money needs to go back to the CONSUMERS who MS ripped off and was able to build the empire off of. If MS just keeps doling out dough to the next monopoly, the cycle of exploitation and usurption will never cease.
Posted by Mekayla_98 (1 comment )
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$75 Million Credit???!
How generous!!! Reminds me of Microsoft's
generous offer to 9/11 victims of free software!
There is a distinctivly strange sense of value
these days. Perhaps $75 million worth of insurance
for software failure due to inept architecture
or design. That would be of value providing ofcourse
you actually use MS software.
Posted by Johnny Mnemonic (374 comments )
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software failure
<a class="jive-link-external" href="http://www.analogstereo.com/vacuum/miele_s4780_vacuum.htm" target="_newWindow">http://www.analogstereo.com/vacuum/miele_s4780_vacuum.htm</a>
Posted by Thunder Johny (200 comments )
Link Flag
Once more,
MS cash soothes the legal waters. And I'd say that they got off
cheap with IBM. Hopefully, the EU penalties will be more significant.
But actually, anything less than a $10B fine is meaningless. After
all, the payments are deductable.
Posted by Earl Benser (4310 comments )
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