Microsoft, IBM settle

Microsoft announced a surprise antitrust settlement with IBM this morning. A summary from the announcement: "Today’s settlement resolves claims arising from the United States v. Microsoft antitrust case in the mid-1990s, where IBM was identified in U.S. District Judge Thomas Penfield Jackson's findings of fact as having been impacted in its business by certain Microsoft practices. Under the agreement, Microsoft will pay IBM $775 million and extend $75 million in credit towards deployment of Microsoft software at IBM."

See coverage by Bloomberg News, the Associated Press, the New York Times, and CNet News.com.

For more background, see the discussion of Microsoft's IBM that begins in paragraph 115 of Jackson's findings of fact. (PDF.) Here's a summary from the ruling:

In sum, from 1994 to 1997, Microsoft consistently pressured IBM to reduce its support for software products that competed with Microsoft’s offerings, and it used its monopoly power in the market for Intel-compatible PC operating systems to punish IBM for its refusal to cooperate. Whereas, in the case of Netscape, Microsoft tried to induce a company to move its business away from offering software that could weaken the applications barrier to entry, Microsoft’s primary concern with IBM was to reduce the firm’s support for software products that competed directly with Microsoft’s most profitable products, namely Windows and Office. That being said, it must be noted that one of the IBM products to which Microsoft objected, Notes, was like Navigator in that it exposed middleware APIs. In any event, Microsoft’s interactions with Netscape, IBM, Intel, Apple, and RealNetworks all reveal Microsoft’s business strategy of directing its monopoly power toward inducing other companies to abandon projects that threaten Microsoft and toward punishing those companies that resist.