Big news of the week was Microsoft's settlement with RealNetworks. This is the latest in a string of settlements undertaken by Microsoft in the last year or so:

Sun Microsystems - US$1.95 billion
IBM - US$850 million
RealNetworks - US$761 million
AOL Time Warner - US$750 million
Novell - US$536 million
InterTrust Technologies - US$440 million
Gateway - US$150 million
Be - $23 million

Quite a pile of cash! You may well ask what's going on. Well there is a connecting thread - in virtually all cases part of the settlement has been a requirement that the recipients withdraw from their participation from the European Union's antitrust proceedings. This case is currently wending its way through the various European courts after Microsoft was fined near $600 million for unfairly using its market position against rivals.

Those who think that the withdrawal part of the deals was merely coincidence should take a quick look at the settlement with the Computer & Communications Industry Association (CCIA) earlier this month. The CCIA got a payment of just under US$20 million from Microsoft, in return for dropping the CCIA's antitrust case.

Weirdly enough the CCIA then used half of this money to give their Chief Executive, Ed Black, a US$10 million bonus. No, I don't understand the logic of doing that either - but I do know that I'm in the wrong business!

I doubt that this will be the end of the payouts, since there are other, ongoing, legal disputes occupying Microsoft's corporate lawyers. The EU case will be with Microsoft for some time yet, and there is the possibility of further cases coming from the EU. Microsoft suffered a further blow last month when the US Patent Office once again displayed their ignorance of anything to do with software by confirming the Eolas web browser patent. In July Go sued Microsoft on antitrust grounds. And the list goes on...

It would be easy to smirk about Microsoft's problems, and, indeed, many of them are of Microsoft's own making. However, before schadenfreude completely takes over, just remember that if a company the size of Microsoft can suffer these sort of legal problems, the precedents set could well put your company and your job next in line.

The lawyers have got the bit firmly between their teeth, and it may not be long before we all have to start paying their fees through the increased cost of our computer software and hardware.

http://ct.news.com.com/clicks?c=569647-7863277&brand=news&ds=5&fs=0

Alan Lenton
October 16, 2005

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