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| MS To Pay IBM $775M+ to Settle Antitrust Claims |
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Friday, July 01 2005 @ 02:16 PM EDT
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I think it's hilarious when I hear Microsoft talking about Linux being vulnerable to litigation. All Microsoft does is go to court. And nowadays they pay rather than let cases go the distance to a judgment. Today it's IBM that benefits from Microsoft's payout, to the tune of $775 million plus another $75 million in credit, and the funny part is, IBM hadn't yet even sued them but merely had a pending claim.
Here's the story from the LA Times: Today's agreement covers legal claims surrounding IBM's OS/2 operating system and Smart Suite software, products that failed to make much inroads against Microsoft's Windows operating system, which operates the vast majority of the world's personal computers.
"IBM is pleased that we have amicably resolved these long standing issues," said Ed Lineen, general counsel for IBM, in a statement.
The IBM settlement is one of the largest Microsoft has agreed to as it seeks to clear up a series of legal claims filed by rivals and government antitrust authorities. Redmond, Wash.-based Microsoft has paid several billion dollars to settle antitrust lawsuits filed by companies ranging from Time Warner Inc. to Sun Microsystems Inc. Last month, Microsoft agreed to pay $150 million to resolve antitrust issues filed by computer maker Gateway Inc.
IT World adds some detail: The settlement resolves all discriminatory pricing and overcharging claims stemming from the U.S. government's mid-1990s antitrust case against Microsoft, the companies said in a press release. The settlement also resolves most other IBM antitrust claims, including those related to its OS/2 operating system and SmartSuite products. IBM's claims of harm to its server hardware and server software businesses are not covered by the settlement, however. . . .As part of the settlement, Microsoft will extend $75 million in credit toward deployment of Microsoft software at IBM. IBM will not make claims for server monetary damages for two years and will not try to recover damages on server claims made before June 30, 2002. In other words, IBM hadn't sued yet and now says it won't in the ways outlined. BusinessWeek has more: IBM hadn't sued Microsoft, but still pressed for retribution for the behavior cited by Jackson. Microsoft reached a similar deal with Gateway Computer Corp. for $150 million in April.
Separately, Microsoft has spent more than $3 billion in recent years settling lawsuits by rivals, including a $1.6 billion deal with Sun Microsystems Inc. in 2004 and a $750 million truce with America Online, part of Time Warner Inc., in 2003.
Redmond, Wash.-based Microsoft still faces other legal challenges, including a lawsuit by RealNetworks Inc. and an appeal of a $600 million antitrust ruling against it by European regulators.
Even so, Microsoft's general counsel, Brad Smith, said he believes the antitrust issues are close to being resolved. IBM had been the biggest rival with a pending claim. A lot of litigation is settled before it ever hits the courthouse, by the way, particularly when the potential defendant figures it can't win or it would be cheaper to settle than to fight. Microsoft's press release, which is the same as IBM's, tells us why now: In November 2003, Microsoft and IBM entered into tolling agreements extending the statute of limitations on antitrust claims based on the U.S. antitrust case while exploring resolutions that would avoid protracted litigation. Microsoft’s and IBM’s tolling agreement was set to expire in July and the parties engaged in settlement discussions during the last two months. For those of you who leave comments about Microsoft walking away scot-free from the U.S. government's antitrust case against it, please note that being found guilty resulted in massive damages. Paying victims off after the fact doesn't fix the problem, though, particularly from the point of view of the consumer, who is still left with having to cope with a monopoly and fewer software choices than otherwise would have been available. That's the problem that needs fixing, and settlements don't address that problem at all, which is very likely exactly why Microsoft is willing to pay out settlements rather than changing the behavior that brought it into litigation in the first place. How profitable it must be, being a monopoly, if paying out billions is cheaper than changing. That doesn't mean there is no effect on Microsoft. Here's an older article on the effect antitrust litigation had on IBM, when they were on the hot seat years ago, even though they were never even found guilty the way Microsoft has been.
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| Authored by: IRJustman on Friday, July 01 2005 @ 02:51 PM EDT |
| Post 'em if ya got 'em! [ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 02:51 PM EDT |
| invest that $775M integrally into promoting Linux and Open Source products. :) [ Reply to This | # ]
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| Authored by: IRJustman on Friday, July 01 2005 @ 02:52 PM EDT |
Be sure you make them clickable per instructions on the post page, and be sure
to post as HTML.
[ Reply to This | # ]
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| Authored by: rsteinmetz70112 on Friday, July 01 2005 @ 02:59 PM EDT |
This pretty much cancels out the license fee Microsoft paid SCOG.
---
Rsteinmetz - IANAL therefore my opinions are illegal.
"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk
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| Authored by: Anonymous on Friday, July 01 2005 @ 03:02 PM EDT |
money money moneyyyyyyyyy
<p>
Seriously though, this does reek. I wish IBM had the guts to tell M$ that if
they wanted to pay money to resolve this then 775 million just wouldnt cut it.
If M$ wants to avoid court (knowing they would lose) then something along the
order of 5- 10 billion would cover the damages. A loss of cash of that magnitude
would seriously hurt even the bankrolls of Gates et all.
<p>
And maybe, just maybe... teach them the lesson they have tried so hard to avoid
learning.[ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 03:25 PM EDT |
By a factor of two. Was Solaris hurt that much more than os/2 and SmartSuite?
Mayhaps IBM will open source os/2 now? I still have fond memories of warp 4.[ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 03:31 PM EDT |
| Seems like $775M is what "innovation" costs these days. [ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 03:43 PM EDT |
I hope this doesn't pave the way to spend 10% of that to quietly settle with
SCO.[ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 04:14 PM EDT |
"As part of the settlement, Microsoft will extend $75 million in credit
toward deployment of Microsoft software at IBM."
Harumph and aargh! Does this mean that us poor souls at IBM will get more
free/substandard MS software? I'm thrilled.[ Reply to This | # ]
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- Doubtful... - Authored by: Anonymous on Saturday, July 02 2005 @ 04:42 AM EDT
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| Authored by: Anonymous on Friday, July 01 2005 @ 04:22 PM EDT |
| As part of the settlement, Microsoft will extend $75 million in credit
toward deployment of Microsoft software at IBM.
Cost to Microsoft:
approximately $0.00, this being the cost of letting IBM run off a few
thousand more copies of Windows XP and MS Office
Benefit to Microsoft:
substantial, because yet another generation of IBM employees gets indoctrinated
in The Microsoft Way. [ Reply to This | # ]
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| Authored by: marbux on Friday, July 01 2005 @ 04:44 PM EDT |
| Note that this settlement exceeds the $500 million reserve Microsoft had
established for paying antitrust claims. Its next round of financial statements
should tell us whether still other claims are pending, by the presence of
absence of a reserve for paying other antitrust claims. ---
Retired
lawyer [ Reply to This | # ]
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| Authored by: Anonymous on Friday, July 01 2005 @ 05:34 PM EDT |
It's all relative. With 37 billion in cash in the bank, they have payed out less
than 10% of it to settle lawsuits. Sure 3 billion is a lot of money, but not so
much for MS[ Reply to This | # ]
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| Authored by: inode_buddha on Friday, July 01 2005 @ 05:52 PM EDT |
Nothing like the scent of fried karma and a coffee first thing in the morning!
---
-inode_buddha
Copyright info in bio
"When we speak of free software,
we are referring to freedom, not price"
-- Richard M. Stallman[ Reply to This | # ]
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| Authored by: rsteinmetz70112 on Friday, July 01 2005 @ 06:04 PM EDT |
The problem with Microsoft's Monopoly is that is is so profitable that no matter
what judgments or settlements are paid the illegal monopoly just keeps piling up
more and more money, making it easy to pay the settlements and judgments. If
Microsoft simply delays the settlement long enough they will have enough money
to pay the settlement. They have more cash now that when they were convicted and
a lot of the cash they had then was the result of their illegal monopoly.
The Judge had it right to begin with the only way to fix the problem is
structural, especially since Microsoft has never either admitted it was wrong or
changed its ways.
---
Rsteinmetz - IANAL therefore my opinions are illegal.
"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk
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| Authored by: RedBarchetta on Friday, July 01 2005 @ 06:19 PM EDT |
Redmond, Wash.-based Microsoft still faces other legal
challenges, including a lawsuit by RealNetworks Inc. and an appeal of a $600
million antitrust ruling against it by European regulators.
PJ
might recall one of my posts just a few articles back where I raised a fury
regarding Microsoft's unwillingness to pay the $600 million fine imposed by
the European commission, to which she kindly responded that it had been paid
already (much to my surprise -- then again, I don't follow this stuff too
closely).
Yet here we have a quote from BusinessWeek that states they
are appealing, with the implication being they haven't paid it yet.
I'm
obviously missing something here...
...help Kool-Aid! (given that
it's a roasting 85F degrees in this suburb of San Francisco, Kool-Aid is not
such a bad idea anyway!).
---
Collaborative efforts
synergise. [ Reply to This | # ]
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- Did MS pay yet? - Authored by: Anonymous on Friday, July 01 2005 @ 09:01 PM EDT
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| Authored by: blacklight on Friday, July 01 2005 @ 10:50 PM EDT |
"Paying victims off after the fact doesn't fix the problem, though,
particularly from the point of view of the consumer, who is still left with
having to cope with a monopoly and fewer software choices than otherwise would
have been available." PJ
One of the consequences of this imposed monopoly is that both corporate and
independent end users have paid premium pricing for the Microsoft software, and
they are certainly not getting any of their money back. And a Microsoft monopoly
on desktop OS effectively amounts to a Microsoft tax on all brand new computers
sold, whether or not their buyers want Microsoft Windows being installed. [ Reply to This | # ]
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| Authored by: darkonc on Saturday, July 02 2005 @ 11:55 PM EDT |
| A lot of litigation is settled before it ever hits the courthouse, by the
way, particularly when the potential defendant figures it can't win or it would
be cheaper to settle than to fight.
At $775Million, it's pretty
clear that MS didn't think it would be cheaper to fight this than pay IBM off.
This is just the intersection of how much Microsoft thought they'd be forced to
pay, and how long (and how much) IBM thought it would take them to win -- modulo
the always-present fear of MS getting off on a technicality. ---
Powerful,
committed communication. Touching the jewel within each person and bringing it
to life.. [ Reply to This | # ]
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| Authored by: Anonymous on Monday, July 04 2005 @ 02:27 AM EDT |
| So, what should IBM do with the $775M ?
In a sense it's 'tainted money';
surely IBM does not wish to be seen as encouraging lawsuits for profit. So maybe
it should be given to IBM's corporate philanthropy; you could do a lot of
Reinventing Education or Trying Science with this amount of capital. And you
could upgrade a lot of the Kidsmart stations that IBM gives, to Playstation 3
with Linux. About 2 million of them, I reckon.
But the money really belongs
to the shareholders. Why not give it to them, as a special dividend. And put in
a 'charity choice' form in case the shareholders see it as tainted money too and
want to make a statement that they do not benefit personally either. [ Reply to This | # ]
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