Partial Antitrust Settlement Reached with IBM

IBM has reached an US$850 million antitrust legal settlement with Microsoft that will resolve all antitrust claims between the companies, except for claims of harm to IBM’s server business, which IBM may not pursue for two years. The deal brings Microsoft one step closer to ending the financial fallout from the antitrust case brought by the U.S. Department of Justice (DoJ).

DoJ Fallout Continues

The latest legal dispute between the two archrivals arises mainly from the Findings of Fact and subsequent legal judgments in the DoJ’s antitrust case against Microsoft. Although the DoJ and Microsoft settled in 2001, the case has provided ample legal ammunition for rivals whom Microsoft harmed through its illegal activity.

In the 1990s, IBM sold PCs preloaded with OS/2 and SmartSuite, alternatives to Microsoft’s two most profitable and important products, the Windows desktop OS and the Office productivity suite. IBM also supported the Java programming language, which theoretically lets applications run on multiple OSs, threatening Windows’ dominance. According to legal documents from the DoJ case, Microsoft retaliated by charging IBM more than other OEMs for copies of Windows and engaging in other tactics, such as withholding Windows 95 so IBM could not sell PCs preloaded with the OS on its release date.