Microsoft rethinks priorities

Microsoft, the world’s largest software maker, said on Monday it has settled two major antitrust disputes, ending more than a decade of challenges and possibly undermining European and United States antitrust cases against the firm.

Microsoft has agreed to pay $536-million to end the dispute over Netware with Novell, and has made peace with the hostile trade group, the Computer & Communications Industry Association (CCIA).

The terms of the trade group deal were unclear, but Microsoft agreed to join the association, pay the group for some of its legal fees over the past decade and provide support for policy undertakings, Bloomberg News Service reported.

“Life is a constant reordering of priorities, and for important and pragmatic reasons, we are choosing to move on with regard to this matter,” Ed Black, the trade group’s president, said in the statement.

In exchange for the settlement, the CCIA and Novell will withdraw their support from the European Union’s case against Microsoft for alleged abuse of its dominance through Windows.

The trade group had also been a key advocate of the US Department of Justice antitrust case against Microsoft. Over past months, US appeals courts have upheld both a settlement in the US case and a judge’s refusal to mete out tougher restraints on the software maker.

Under Monday’s agreement, CCIA said it would not appeal those rulings to the Supreme Court, which “effectively” ends the US antitrust case, Horacio Gutierrez, Microsoft’s European counsel, was quoted as saying by Bloomberg.

In the US, Microsoft agreed to give computer makers freedom to promote software that competes with the company’s products.

In March, the European Union regulators slapped a fine of $612-million on the Seattle-based company and also ordered Microsoft to share more details of the inner workings of Windows with rivals that make network server computer products.

The regulators ordered Microsoft to sell a version of Windows in Europe stripped of its digital media player in order to allow rival players such as that offered by Real Networks a greater chance of success.

The media player is a cornerstone of Longhorn, which is the platform on which Microsoft plans to push into future digital music, movie, TV and phone services which are expected to be at the centre of the internet use as broadband access widens.

By insisting that Microsoft offer a Windows platform shorn of the media player, EU regulators also put Microsoft on notice that future additions to its dominant Windows operating system, such as a search engine built into the programme, might also fall foul of European law.

By withdrawing its support for the European case, the industry trade group CCIA had removed “the most substantial obstacle” to settling the case in there, Microsoft General Counsel Brad Smith was quoted as saying.

Microsoft had appealed the March European Union ruling, and a judge was to rule in the coming weeks about execution of the fine order, Bloomberg reported.

Microsoft has been confident it could evade most of the European penalties and delay the imposition of the ruling until after it introduces its next generation operating system in 2006. An appeals process was estimted to take until 2009, by which time the new Longhorn system would have been shipped.

Microsoft has paid or set aside $3-billion to cover antitrust suits, Bloomberg said.

In April, Microsoft agreed to pay $440-million to Silicon Valley company Intertrust to settle a lawsuit that the software giant illegally used technology for protecting music, movies and other digital content against piracy, the firms announced on Monday.

Also in April, Microsoft reached a $1,7-billion peace settlement with archrival Sun, which could see the two companies cooperate in the coming era of internet services.

As part of Monday’s deal, Novell has dropped claims involving its Netware operating system, but claims about the company’s WordPerfect software were not addressed.
- Sapa-DPA

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