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IBM Wins $850M Settlement From Microsoft
First Coast News ^
| 7/1/05
| AP
Posted on 07/01/2005 10:04:24 AM PDT by Tumbleweed_Connection
IBM Corp. will receive $775 million in cash and $75 million in credit for software from Microsoft Corp. to settle claims that resulted from the federal government's antitrust case against Microsoft in the 1990s, the companies announced Friday.
The payout is one of the largest that Microsoft has made since U.S. District Judge Thomas Penfield Jackson ruled in 2000 that Microsoft engaged in anticompetitive practices. Jackson's ruling cited IBM as a company that Microsoft had forced to "desist from certain technological innovations and business initiatives."
For example, Microsoft didn't charge all computer makers the same amount for its Windows operating system, allegedly using higher prices as a cudgel against PC companies that didn't comply with Microsoft's wishes.
IBM had irked Microsoft in the '90s by pushing its own OS/2 operating system as a Windows alternative and putting its SmartSuite productivity software on IBM PCs, cutting into the market for Microsoft Office programs. IBM also was an early supporter of Java, a programming language that doesn't need Windows to run.
Citing the higher Windows prices and other tactics - such as delaying IBM's Windows 95 license until 15 minutes before the product was launched - Jackson wrote that IBM repeatedly got "discriminatory treatment" from Microsoft.
IBM hadn't sued Microsoft, but still pressed for retribution for the behavior cited by Jackson. Microsoft reached a similar deal with Gateway Inc. 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.
"This takes us another very significant step forward," he said in an interview. "We're entering what I think is the final stage of this process."
IBM shares were rose $1.04, 1.4 percent, to $75.24 in morning trading on the New York Stock Exchange. Microsoft shares rose 5 cents to $24.89 on the Nasdaq Stock Market.
The U.S. case against Microsoft led Judge Jackson to rule in 2000 that Microsoft should be broken into two companies as punishment for its monopolistic practices. But a year later, with the Clinton-era Justice Department having given way to the Bush administration, the government decided not to seek the breakup. The case was settled in 2002.
Neither IBM nor Microsoft have decided when the $775 million payment will be accounted for. Microsoft set aside $550 million in April to handle antitrust claims, so this deal might result in a charge from that quarter, Smith said.
Whenever it comes, the payment would be a significant boost for Armonk, N.Y.-based IBM, which showed a $1.4 billion profit in the first quarter but fell short of analysts' expectations.
Even with Friday's deal, IBM reserved the right to press claims that its server business was harmed by Microsoft's behavior. However, such claims appear unlikely to surface soon, because IBM also agreed that it would not seek damages for actions that occurred before mid-2002. That means the findings in Jackson's ruling would no longer apply.
TOPICS: News/Current Events
KEYWORDS: convictedmonopoly; internetexploiter; news
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To: Golden Eagle
Are you saying IBM should get a free pass if they illegally used Unix code in Linux? Should anybody, if they did? That's a pretty big "if" to be making statements like that about. Even the judge said they don't have any evidence, and wanted to grant all of IBM's motions, but couldn't on procedural grounds. Even Brian Kernighan (you do know who he is, right?) says that SCO's analysis for stolen code had "fundamental errors" and that they used an "indefensible standard for what qualifies as 'substantially similar' code"
Does that sound like IBM is likely to have infringed? Of course if they did they should pay, but the odds are against it. I'd say IBM has a better chance in their copyright infringement counterclaim against SCO.
To: Golden Eagle
Everyone who's violated anyone's rights or property in the IT industry needs to pay up. The sooner the better. I agree. For example, companies which file baseless lawsuits and slander competitors should be penalized.
22
posted on
07/01/2005 1:31:57 PM PDT
by
ThinkDifferent
(These pretzels are making me thirsty)
To: Publius6961
You do have other choices besides Microsoft.
My company exclusively uses OpenOffice for our office suite.
When we upgraded to WinXP, Word 2000 no longer worked, and I wasn't paying for a similar program just to send $ to the extortionist M$, IMHO.
I suggest you disconnect form M$ where you can. Browser and Office Suite is one area where you can do this, and one that will save you quite a bit of money too.
I still use WinXP SP2, but I run Linux on one of my laptops.
23
posted on
07/01/2005 2:55:35 PM PDT
by
Sonar5
(60+ Million have Spoken Clearly - "We Want Our Country Back")
To: Bush2000
Uhhhhhhhh ... there is no market for MS Office for Linux. Dog, chase tail. Oh, I bet there would be a very large market for MS Office for Linux in the corporate IT space. It would simply come at the expense of Windows because it would let corporate IT departments use Linux as an OS and that's why Microsoft won't do it.
To: Bush2000
Your comments would lead the average reader to conclude that you think this behavior is ongoing: Yes, I do, though I do think Microsoft has improved in certain areas.
So, I ask you: What strong-arm tactics is Microsoft currently using?
Does the phrase "embrace and extend" ring any bells?
I see a lot of circumstantial evidence that Microsoft is still trying to compete through control rather than quality or price when I look at things like DRM, next generation DVDs, and web services.
There is also the point that Microsoft never really admitted they were wrong and likes to push every ruling against them to see what they can get away with. That doesn't suggest that the people on top have reformed their attitudes any and would still crush their competition with anti-competative behavior if they could get away with it.
(And, for the record, no I don't think Microsoft did anything different than Netscape did earlier when they gave their browser away for free. But there is a reason why they don't allow that for hardware and call the practice "dumping".)
Yeah, I'm sure you are willing to just trust Microsoft. Please excuse the rest of us if we continue to have our doubts.
To: Question_Assumptions
Oh, I bet there would be a very large market for MS Office for Linux in the corporate IT space.
Proof?
26
posted on
07/05/2005 1:52:11 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Question_Assumptions
Does the phrase "embrace and extend" ring any bells?
Recent example?
I see a lot of circumstantial evidence that Microsoft is still trying to compete through control rather than quality or price when I look at things like DRM, next generation DVDs, ...
These issues have more to do with CONTENT PROVIDERS than Microsoft. Nobody in Hollywood is going to release their content on any kind of media unless there are reasonable protections (ie. DRM, etc). As for next generation DVDs, Sony's favored Blu-Ray format requires a caddy, which makes it totally unsuitable for many applications.
... and web services
Well, considering that MS was one of the original parties involved in drafting the SOAP spec, I'm not surprised that it would be involved. But what and how is it trying to control web services? There are plenty of other parties working on interop in this space side-by-side with MS.
There is also the point that Microsoft never really admitted they were wrong ...
It didn't have to admit guilt. The court made the case very clearly.
... and likes to push every ruling against them to see what they can get away with. That doesn't suggest that the people on top have reformed their attitudes any and would still crush their competition with anti-competative behavior if they could get away with it.
You must live in some kind of fantasy world where everybody that gets sued just agrees with the plaintiff, rolls over, and gets raped. I don't know of any defendant that doesn't challenge lawsuits against them.
27
posted on
07/05/2005 2:04:35 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Question_Assumptions
Does the phrase "embrace and extend" ring any bells?
Recent example?
I see a lot of circumstantial evidence that Microsoft is still trying to compete through control rather than quality or price when I look at things like DRM, next generation DVDs, ...
These issues have more to do with CONTENT PROVIDERS than Microsoft. Nobody in Hollywood is going to release their content on any kind of media unless there are reasonable protections (ie. DRM, etc). As for next generation DVDs, Sony's favored Blu-Ray format requires a caddy, which makes it totally unsuitable for many applications.
... and web services
Well, considering that MS was one of the original parties involved in drafting the SOAP spec, I'm not surprised that it would be involved. But what and how is it trying to control web services? There are plenty of other parties working on interop in this space side-by-side with MS.
There is also the point that Microsoft never really admitted they were wrong ...
It didn't have to admit guilt. The court made the case very clearly.
... and likes to push every ruling against them to see what they can get away with. That doesn't suggest that the people on top have reformed their attitudes any and would still crush their competition with anti-competative behavior if they could get away with it.
You must live in some kind of fantasy world where everybody that gets sued just agrees with the plaintiff, rolls over, and gets raped. I don't know of any defendant that doesn't challenge lawsuits against them.
28
posted on
07/05/2005 2:05:32 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Bush2000
Do some web searches on "Microsoft Office" and Linux and you'll find (A) that there are commercial products that allow users to run older version of Office on Linux, (B) that IBM has expressed interest in the idea, and (C) quote a few of the articles talking about corporate adoption of Linux on the destop talk about companies not switching because of Office or caution against switching because of Office. All of that suggests quite a bit of demand to me. But, hey, believe whatever you want. If OpenOffice ever gets good enough to challenge MS Office, it will be too late.
To: Bush2000
Please note that your points about Microsoft's legal problems simply support the need for the government to keep an eye on them. Since you seem to admit that Microsoft was guilty, does that mean that you think the legal action was justified and necessary, then?
To: Question_Assumptions
All of that suggests quite a bit of demand to me. But, hey, believe whatever you want. If OpenOffice ever gets good enough to challenge MS Office, it will be too late.
Wishful thinking. Talk doesn't amount to demand.
31
posted on
07/05/2005 8:06:04 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Question_Assumptions
Please note that your points about Microsoft's legal problems simply support the need for the government to keep an eye on them.
An eye on them? Yes. Onerous regulation? No.
Since you seem to admit that Microsoft was guilty, does that mean that you think the legal action was justified and necessary, then?
Let's be clear here. I understand the court's ruling but, given the fact that antitrust law is basically whatever the DOJ says it is and a plaintiff can't be aware of a violation until after the fact, I think the whole deal stinks to high heaven. MS may have done some rough things a decade ago, but there is no evidence that it's doing the same now. You didn't address any of my points.
32
posted on
07/05/2005 8:09:23 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Bush2000
What kind of a bar are you setting. If someone says gee I would really like to run office on a linux desktop does that not imply demand?
If not than what is the bar to show demand?
33
posted on
07/06/2005 9:01:33 AM PDT
by
N3WBI3
(I musta taken a wrong turn at 198.182.159.17)
To: Bush2000
You want evidence. Unless you work for the DOJ or are privy to the highest levels of Microsoft's management decisions, I doubt either of us has any real evidence either way. Yeah, you put the burden of proof on me and that's fine. But I'm looking at patterns of behavior, past and present. If I apply the fact that the key decision makers haven't changed substantially and that they've admitted know wrong to any other area of life (e.g., a neighbor who tries to financially ruin another neighbor, is stopped by the courts, but never admits that he did anything wrong or, perhaps, a nasty dog that bit me and still gowls and barks when I walk by), I wouldn't trust those decision makers. Perhaps you are willing to forgive and forget without repentence. I'm not, whether it's Microsoft of Mike Tyson. Clearly, you want to trust Microsoft and clearly I don't, and we aren't going to settle an issue of trust the way you seem to want to. Microsoft lost my trust by their past behavior. I don't trust them. A lot of people don't. Trust works that way. If they want to regain my trust, they have to do more than be good just because the DOJ is watching them. They have to convince me that they've changed.
As for law enforcement being random and unpredictable, that's a much bigger issue than just Microsoft. To a certain degree, I probably agree with you there but that's what we get for letting judges rule the country. If George W. Bush folds and nominates a "moderate", I'm done with him. We need to get judges out of the business of creating laws.
Again, I don't hate Microsoft. I simply don't want to see them using their weight to drive competition out of business. It's not even about market share (below 100%) or how much Bill Gates makes for me. But Macs and the threat of Linux have helped drive Microsoft to make their products better and that's a win for the people who do use Microsoft products. Without competition, that just doesn't happen. And that's why anti-competative behavior bothers me so much.
To: Bush2000
Wishful thinking. Talk doesn't amount to demand. Selling a commercial software product that allows people to run MS Office on Linux isn't talk. But beyond that, if "talk" isn't good enough for you, then how exactly is one supposed to judge demand without actually producing a product to see who will buy it? And let's not forget OpenOffice, which also suggests some demand for an Office suite on Linux, a role that an MS Office port could easily fill. The obvious reasaon why Microsoft isn't interested in the Linux space is that Linux is competition, not for MS Office but for Windows. That's very similar to why Apple won't port the Mac OS to standard Intel machines. It's not that they can't. It's just that Apple serves two masters (hardware and OS). So does Microsoft (applications and OS). And the one can't risk hurting the other.
To: N3WBI3
What kind of a bar are you setting. If someone says gee I would really like to run office on a linux desktop does that not imply demand?
I don't see any objective evidence that significant numbers of people are saying that. How are you concluding that? From people you work with? From random Linux websites?
36
posted on
07/06/2005 11:53:17 AM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Bush2000
Oh right now its compleatly subjective, but then again so is your claim thats its not in demand. At least some subjective measure was provided to you.
If yuo want to argue for arguments sake have at it, im trying to get away frmo that idiotic game..
37
posted on
07/06/2005 11:58:57 AM PDT
by
N3WBI3
(I musta taken a wrong turn at 198.182.159.17)
To: Question_Assumptions
You want evidence.
That would be nice.
Unless you work for the DOJ or are privy to the highest levels of Microsoft's management decisions, I doubt either of us has any real evidence either way. Yeah, you put the burden of proof on me and that's fine. But I'm looking at patterns of behavior, past and present. If I apply the fact that the key decision makers haven't changed substantially and that they've admitted know wrong to any other area of life (e.g., a neighbor who tries to financially ruin another neighbor, is stopped by the courts, but never admits that he did anything wrong or, perhaps, a nasty dog that bit me and still gowls and barks when I walk by), I wouldn't trust those decision makers.
Fine. You don't trust them. But you don't have any
PROOF that Microsoft is strong-arming ANYBODY. So, your earlier charge from post #13 is bogus.
"Why can't Microsoft complete on the merits of their products and prices rather than strong-arm tactics."
I think it's fine not to trust them. But you're projecting your
feelings when you accuse them of wrongdoing which is not substantiated by the facts.
As for law enforcement being random and unpredictable, that's a much bigger issue than just Microsoft. To a certain degree, I probably agree with you there but that's what we get for letting judges rule the country. If George W. Bush folds and nominates a "moderate", I'm done with him. We need to get judges out of the business of creating laws.
Here, we agree.
Again, I don't hate Microsoft. I simply don't want to see them using their weight to drive competition out of business. It's not even about market share (below 100%) or how much Bill Gates makes for me. But Macs and the threat of Linux have helped drive Microsoft to make their products better and that's a win for the people who do use Microsoft products. Without competition, that just doesn't happen. And that's why anti-competative behavior bothers me so much.
Where's the evidence of anti-competitive behavior? I'd like you to point it out to me. DRM and other content protection mechanisms are a standard means of protecting business investments that go well beyond Microsoft. That's not anti-competitive. It reduces piracy.
38
posted on
07/06/2005 12:01:16 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: N3WBI3
Oh right now its compleatly subjective, but then again so is your claim thats its not in demand.
Nice try. But I didn't make the original assertion that it is in demand, so I bear no burden to prove the converse.
At least some subjective measure was provided to you. If yuo want to argue for arguments sake have at it, im trying to get away frmo that idiotic game..
Thanks for nothing. Your subjective assessment is worth zippo to anyone but you.
39
posted on
07/06/2005 12:03:06 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
To: Question_Assumptions
Selling a commercial software product that allows people to run MS Office on Linux isn't talk. But beyond that, if "talk" isn't good enough for you, then how exactly is one supposed to judge demand without actually producing a product to see who will buy it? And let's not forget OpenOffice, which also suggests some demand for an Office suite on Linux, a role that an MS Office port could easily fill. The obvious reasaon why Microsoft isn't interested in the Linux space is that Linux is competition, not for MS Office but for Windows. That's very similar to why Apple won't port the Mac OS to standard Intel machines. It's not that they can't. It's just that Apple serves two masters (hardware and OS). So does Microsoft (applications and OS). And the one can't risk hurting the other.
One of the impediments to Linux desktop migration cited by major corporations is the fact that MS Office and many other popular Windows apps don't run on Linux. As you say, there are tools to run MS Office apps on Linux (ie. Crossover Office, etc) -- and yet there hasn't been any significant migration to desktop Linux. So, when I look at these two facts objectively, I can only conclude that the existence of the tools hasn't found any significant demand. Maybe someday, but not now.
40
posted on
07/06/2005 12:07:43 PM PDT
by
Bush2000
(Linux -- You Get What You Pay For ... (tm)
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