Microsoft settles with IBM

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The settlement resolves claims arising from the decade-old US v Microsoft antitrust case in which IBM's business was identified as having been impacted by certain Microsoft practices.

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

In addition to addressing all discriminatory pricing and overcharge claims, the settlement resolves all antitrust claims, including claims related to the IBM OS/2 operating system and SmartSuite products, with the exception of claims for harm to IBM’s server hardware and server software businesses.

IBM has agreed, subject to certain limitations, that it will not assert claims for monetary damages to its server business for two years and will not seek to recover damages on such claims incurred prior to June 30, 2002.

In November 2003, Microsoft and IBM entered into tolling agreements extending the statute of limitations on antitrust claims based on the US 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.