Sun, Jul 03, 2005 - Page 11 News List

Microsoft and IBM settle antitrust suit

GIFT VOUCHERS In addition to a cash payment to make up for discriminatory pricing practices, Big Blue will receive US$75 million credit to be used on Microsoft software

NY TIMES NEWS SERVICE , SAN FRANCISCO

The company said on Friday that it would describe how it would account for the IBM settlement when it reports its quarterly financial results in July.

"This is just cleaning up the remaining mess on the floor," said Robert Litan, a senior fellow at the Brookings Institution and a former Justice Department prosecutor.

Litan also noted that while Microsoft's software monopoly in the home PC market has remained durable despite the federal antitrust ruling, the rise of the Linux operating system, which is freely distributed, has proven a powerful counterweight to Microsoft's power in the corporate server market.

"You cannot underestimate the impact of Linux" on the computing industry in recent years, Litan said.

Microsoft also settled with Novell in November last year for US$536 million for claims related to the antitrust case; however, Novell has since filed a second antitrust suit against Microsoft related to its WordPerfect word-processing software application.

Microsoft is also facing a lawsuit by RealNetworks over its Windows Media Player software and is appealing a US$600 million antitrust ruling brought by European regulators.

As part of the ruling in 2000, Jackson ordered that Microsoft be broken into two companies to curb its monopolistic practices. But the next year, the new Bush administration decided not to seek a breakup, and the Justice Department settled the case in 2002.

Shares of IBM shares rose US$0.47 on Friday, to close at US$74.67. Microsoft shares declined US$0.13, to close at US$24.71.

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