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Microsoft Placates Two Foes

Settlements Set For Novell, CCIA

By Jonathan Krim
Washington Post Staff Writer
Tuesday, November 9, 2004; Page E01

Microsoft Corp. settled legal disputes yesterday with two of its largest remaining antagonists, ensuring that its antitrust deal with the Justice Department will not be appealed to the U.S. Supreme Court, and removing two active proponents of a case against the company in the European Union.

Continuing a three-year campaign to end its lengthy legal battles through deals that often involve large cash payments, Microsoft said it would pay longtime rival Novell Inc. $536 million. In return, Massachusetts-based Novell agreed to withdraw from the E.U. case and not sue Microsoft over any software Novell currently owns. A Novell statement said, however, that the company still plans to sue over a product Novell no longer owns but claims was damaged by Microsoft's previous conduct.

Microsoft agreed to pay Novell Inc. $536 million to settle antitrust legal challenges over software. (Douglas C. Pizac -- AP)

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Microsoft neither admitted or denied wrongdoing as part of the settlement.

In the E.U. case, several large companies had complained that Microsoft was breaking European antitrust laws by denying rivals the critical computer code that allowed their software to work properly with Microsoft's Windows systems. Separately, Microsoft said it is joining the Computer & Communications Industry Association, a trade group representing many Microsoft rivals that has fought pitched battles with the software giant for nearly a decade.

The group, whose members include Oracle Corp., Sun Microsystems Inc. and Time Warner Inc., actively lobbied Congress and state and federal prosecutors to convince them that Microsoft was an unrepentant, law-breaking monopolist that needed to be reined in.

A joint statement said Microsoft would pay an undisclosed sum to CCIA to cover some of its legal costs. CCIA will no longer participate in the current E.U. case and will withdraw a separate complaint against Microsoft's newest operating system, Windows XP, which CCIA filed in conjunction with other companies in early 2003.

CCIA also agreed not to pursue a possible Supreme Court appeal of Microsoft's 2001 antitrust deal with U.S. prosecutors, struck after federal courts found that the company had violated antitrust laws. The trade group had attacked the settlement as being full of loopholes that would not halt what it regarded as Microsoft's predatory practices.

"This sends a strong message that we and other companies in our industry have the capacity to sit down face to face on issues that in the past were left to the government to resolve," Microsoft general counsel Brad Smith said in a telephone news conference.

In a statement, Smith added that the agreement "helps us support an effective alliance to address issues that will benefit the industry and consumers in the future."

CCIA President Edward J. Black, deliverer of scathing verbal attacks on Microsoft over the years, agreed, but added that the company and the group would still be at odds over some issues.

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