Microsoft, IBM Settle Antitrust Case
Microsoft settled another of its antitrust cases on Friday, announcing it had reached a settlement with IBM worth some $775 million. The suit was filed in the mid-1990s and said that Microsoft had hurt the sales of its OS/2 operating system as well as its hardware and software business by some of its business practices.
As part of the deal, Microsoft will also credit IBM $75 million for the installation costs of its software on IBM's company machines. The agreement comes after two months of talks, and the group running up against a self-imposed July deadline to come to an agreement.
"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," Brad Smith, general counsel and senior vice president, Microsoft said in a joint statement.
But not all is settled. IBM still has an outstanding suit against Microsoft that claims impropriety by the company in IBM's server business. However, as part of today's agreement, IBM agreed not to seek monetary damages for a period of two years. Also, the company would not be able to seek damages for claims before June 30, 2002.
"Microsoft has plenty of good reasons for resolving outstanding claims affecting companies like IBM. In his ruling against Microsoft, U.S. District Judge Thomas Penfield Jackson identified companies injured by Microsoft's anticompetitive behavior, including IBM. The settlement resolves issues related to IBM's OS/2 and Smartsuite products, but not server software.
"I'm not surprised that IBM left open potential issues regarding server software. For one, the server-oriented European antitrust case isn't resolved, because of Microsoft's appeal. For another, IBM is a fierce Microsoft competitor on servers, where Linux has its strongest traction," Senior Jupiter Analyst Joe Wilcox told BetaNews.
"IBM is pleased that we have amicably resolved these long standing issues," Ed Lineen, senior vice president and general counsel, IBM said.
David Worthington contributed to this report.