Microsoft, AOL Time Warner Settle Suit
Posted on: Thursday, 29 May 2003, 06:00 CDT
By HELEN JUNG
SEATTLE (AP) -- Microsoft Corp. (MSFT) will pay AOL Time Warner $750 million and let the media company license its browsing software for seven years in a settlement to resolve an antitrust lawsuit against the software giant, the companies announced Thursday.
The settlement also calls for Microsoft to license its digital media technology to AOL, as well as work with the company to promote digital media initiatives.
Microsoft will provide technical information to AOL to ensure that its products run effectively on the Windows operating system.
The agreement resolves a lawsuit AOL filed against Microsoft in January 2002 on behalf of its subsidiary, Netscape Communications. The complaint was one of several private antitrust lawsuits still pending against Microsoft over anticompetitive behavior.
AOL had alleged in the lawsuit that Microsoft used anticompetitive business practices to ensure the dominance of its Internet Explorer browsing software over Netscape's software. AOL argued that Microsoft made deals with computer manufacturers and others to shut out Netscape and quash competition.
"These agreements are good news for the AOL service, its members and the Internet as a whole," said Jonathan Miller, chairman of the America Online division. "It provides America Online with certainty that, as Microsoft develops new operating systems and platforms, the AOL service will work optimally with them to the benefit of our members worldwide."
"While our companies will continue to compete, I'm pleased that we've been able to resolve our prior dispute and I'm excited about the opportunity to work together collaboratively to make the digital decade a reality," Microsoft chairman Bill Gates said.
The settlement reflects the push that both companies are making in the emerging world of digital media. Microsoft has agreed to a long-term license of existing and future digital rights management software - which is designed to prevent illegal copying and downloading of digital music, movies, and other content - to AOL.
In addition, the two companies plan to explore how to integrate their two instant-messaging networks to allow users of one company's service to use the other's.
Shares of Microsoft closed Thursday down 1 cent to $24.40 a share on the Nasdaq Stock Market. Shares fell 10 more cents in after-hours trading. AOL shares closed Thursday down 1 cent to $14.85 each on the New York Stock Exchange. They rose 38 cents, or 2.6 percent, in extended trading.
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