Microsoft Pays £435m to Settle Ibm Dispute

Microsoft today agreed to pay IBM $755m (£435.5m) to settle a long-running dispute arising from a government antitrust case.

The companies said the payment settled claims arising from the federal government's landmark antitrust case against Microsoft in the mid-1990s, in which IBM was identified as having been affected by certain Microsoft practices.

Under the terms of the agreement, Microsoft will not only pay IBM $775m but will also extend $75m in credit towards the deployment of Microsoft software at IBM.

The companies said the settlement resolved all antitrust claims in connection with the IBM OS/2 operating system and SmartSuite products except claims for harm to IBM's server hardware and server software businesses.

"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, the general counsel and senior vice-president of Microsoft, said.

Over the last few years, Microsoft has sought to resolve disputes with companies in connection with the antitrust case. Mr Smith said today's announcement was "another significant step towards achieving that goal".

Microsoft last year paid Sun Microsystems $1.6bn to end a 10-year dispute. In March, it agreed to pay $60m to settle a patent and antitrust dispute with Burst.com, and the following month elected to pay Gateway $150m to end a case similar to the IBM one.

In the government's 1998 antitrust lawsuit, Judge Thomas Penfield Jackson ruled that Microsoft had bullied IBM, Gateway and other computer makers to promote the software company's Internet Explorer browser.