Microsoft to Settle Two Cases
Microsoft Corp. agreed Monday to pay more than $500 million to settle two of the largest remaining antitrust complaints it faces, bringing the software behemoth a big step closer to resolving its long-running legal problems.
Microsoft said it would pay Novell Inc. $536 million to end claims that it improperly used its market dominance to muscle out Novell’s NetWare operating system, which controls groups of computers. Microsoft also said it would pay an undisclosed but smaller amount to the Computer & Communications Industry Assn., a trade group active in the antitrust cases against the Redmond, Wash.-based company in the U.S. and Europe.
For its part, the computer association agreed not to appeal Microsoft’s settlement with the Justice Department to the Supreme Court, effectively ending a case that began in 1998.
Monday’s agreements were smaller than Microsoft’s settlements with Time Warner Inc., Sun Microsystems Inc. and consumers represented in various class-action suits. But they ended a long and disruptive phase in Microsoft’s corporate career.
Besieged by antitrust lawsuits for much of the last decade, the company has moved methodically to settle them in the last couple of years. It has now paid or committed to pay in excess of $3 billion -- roughly a single quarter’s profit.
Analysts said that as Microsoft’s legal woes receded, the company would feel more free to experiment with new markets and integrate new features into core products such as its ubiquitous Windows operating system.
“Hopefully, it will give them some room to maneuver,” said Piper Jaffray analyst Eugene Munster.
Microsoft has tried to expand its dominance in personal computer software to cellphones, video game machines and cable television systems. On Monday, for instance, Comcast Corp. said it would roll out Microsoft’s electronic program guide to Seattle-area subscribers of Comcast’s digital service.
Novell and the computer association were active supporters of European Commission penalties imposed against Microsoft in March. Those penalties, which Microsoft is appealing, require the company to disclose more of its programming code and to offer a version of Windows without an audio and video player.
A European Commission spokeswoman said the private settlements shouldn’t influence court rulings on the appeal because all the evidence had been submitted. She added that the antitrust staff could still pursue a more recent complaint filed by the computer association over Microsoft’s Windows XP.
Microsoft General Counsel Brad Smith said that with Monday’s payouts, the company for the first time could see a potential end to its days in court.
It can also estimate the cost of settling the remaining lawsuits. And Microsoft said it didn’t expect to pay more than $950 million for all the remaining actions, including suits by consumers and one by RealNetworks Inc., the last major complainant to the European Commission.
But just as one case ends, another may be about to begin. Novell is expected to sue Microsoft over its conduct in the mid-1990s against Novell’s WordPerfect word processing software.
Once a major competitor to Microsoft Word, WordPerfect’s market share decreased rapidly between 1994, when Waltham, Mass.-based Novell bought it for more than $800 million, and 1996, when it was sold for less than $200 million.
Novell spokesman Bruce Lowry said the federal suit would be filed this week.
Microsoft shares slipped 3 cents to $29.28. Novell shares gained 65 cents to $7.51. Both trade on Nasdaq.
