Updated: July 12, 2020 (April 18, 2005)

Antitrust Bites March Earnings

As managing vice president, Rob Helm covers Microsoft collaboration and content management. His 25-plus years of experience analyzing Microsoft’s technology... more

Pretax charges of US$714 million came out of Microsoft’s Q3’05 earnings to fund antitrust settlements with Gateway, Burst.com, and other unnamed claimants. (Q3’05 ended Mar. 31, 2005.) By taking these charges, Microsoft clears away some financial liabilities from the U.S. Department of Justice (DoJ) antitrust case, in which the company was found to have illegally manipulated OEMs in an effort to maintain its Windows monopoly.

Gateway payout from DoJ claims. Gateway will get US$150 million over four years to settle its antitrust claims against Microsoft, with US$123 million charged in the quarter ended Mar. 31, 2005.

Gateway’s claims, which were never filed in court or publicly announced, came out of the Findings of Fact in the DoJ case. Those findings assert that Microsoft charged Gateway higher prices for Windows than it did other OEMs of comparable size because Gateway shipped the Netscape Navigator browser preinstalled on its PCs rather than shipping Microsoft’s Internet Explorer exclusively.

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