Microsoft Makes Another Antitrust Deal
Software giant settles with Novell and the CCIA, ending years of legal wrangling.Grant Gross, IDG News Service
Microsoft this week announced antitrust settlements with Novell and the Computer and Communications Industry Association (CCIA), ending years of legal wrangling.
The settlement with CCIA ends an eight-year investigation and antitrust case brought by the U.S. Department of Justice. CCIA was the final group challenging a November 2002 settlement ruling by U.S. District Court Judge Colleen Kollar-Kotelly.
Novell and CCIA were also two major Microsoft opponents in an antitrust case before the European Commission. RealNetworks is the last remaining company with a broad-based complaint in the European Commission case, although the Free Software Foundation and other groups continue to be part of that case, says Brad Smith, senior vice president and general counsel for Microsoft.
The agreement with CCIA "removes the most substantial obstacle" to a settlement in the European case, Smith says. "We believe this sends a strong message that we and other companies in our industry do have the capacity now to sit down face to face and resolve the kinds of thorny antitrust issues that in the past were left instead to the government to resolve," he adds.
Money Matters
Microsoft will pay Novell $536 million under the agreement, in which Novell will resolve all antitrust claims relating to Novell's NetWare product, and any other products it owns. The agreement came out of private mediation between the two companies, according to a joint news release. The payment to Novell brings the total amount of antitrust settlements Microsoft has paid to just under $3 billion, Smith says.
Novell will end its antitrust claims under U.S. and all other national and state laws concerning its products. Novell will also withdraw from participation in the European Commission's case with Microsoft and will no longer participate as an intervener on behalf of the European Commission in Microsoft's appeal of the commission's March 24 ruling.
Microsoft will also end its counterclaims to those antitrust claims regarding NetWare. The agreement does not obligate Microsoft to license or otherwise share any of its technology or intellectual property rights with Novell, nor does it include any admission of wrongdoing by Microsoft.
"These agreements represent another substantial milestone in Microsoft resolving the issues that have divided our industry over the past decade," Smith says. "Today's settlement means that the long-standing antitrust litigation in the U.S. is now over. The litigation phase is now complete."
The two companies were not able to reach agreement concerning Novell's antitrust claims related to its ownership of the WordPerfect word-processing software package between June 1994 and March 1996. Novell retains the right to pursue those claims, and the company announced Monday that by the end of the week, it will file a lawsuit in U.S. District Court in Utah seeking unspecified damages related to WordPerfect.
The antitrust agreement "settles some potential litigation to our advantage," says Novell spokesperson Hal Thayer. "We think this is very straightforward."
Microsoft restated its first-quarter results, announced October 21, to compensate for the settlement.
Teaming Up
As part of the CCIA settlement, Microsoft will join the trade group. The company will also pay CCIA for some legal expenses for some cases in the past decade.
CCIA agreed not to ask the U.S. Supreme Court to review its challenge to the antitrust settlement in the U.S. Department of Justice's case against Microsoft. CCIA has also agreed that it will no longer participate as an intervener on behalf of the European Commission in Microsoft's appeal of the commission's March 24 antitrust ruling, and it will also withdraw its complaint with the European Commission filed in February 2003 on issues related to Microsoft Windows XP. Specific financial terms of the agreement are confidential.
The CCIA, in a press release, says the settlement allows the trade group to focus its resources on other issues facing the industry.
"While there may be times when we and Microsoft will not agree on every issue, we are looking forward to developing a stronger relationship," Ed Black, president and chief executive officer of CCIA, says in a statement. "We believe that CCIA has an important opportunity to help unite the industry more effectively on key issues such as broadened Internet access, strong support for R&D, and ensuring that we act as an effective engine for economic growth around the world."