Microsoft To Pay IBM In Antitrust Settlement

Pankaj Arora writes "A settlement has been reached in IBM's private antitrust case against Microsoft. According to the terms of the settlement, Microsoft will pay IBM $775 million cash in addition to $75 million in credit. From the article, 'The settlement resolves all discriminatory pricing and overcharging claims stemming from the U.S. government's mid-1990s antitrust case against Microsoft, the companies said in a statement. The settlement also resolves most other IBM antitrust claims, including those related to its OS/2 operating system and SmartSuite products. IBM's claims of harm to its server hardware and server software businesses are not covered by the settlement, however.'"

Comments

Piffle

[ackthpt]

$850 million to Microsoft? Pfft! They've probably lost that much on XBox sales and they're still going. Good thing they've got all those insanely profitable divisions and that $40 billion + cash reserve.

Of course IBM could, as the news suggests, hit them again for more money, it's hardly going to dent Microsoft. What they need is restraint or some measures with some teeth in them which raise the bar.

Re:Piffle

[cloudofstrife]

Yes, laws with teeth would be nice, but there are things called lawyers, which as the longer name would suggest, have longer teeth and are much more dangerous than simple laws. Microsoft plenty of nasty lawyers, and enough money to buy off the rest of the judges that won't pay attention to the lawyers.

Re:Piffle

[ZephyrXero]

Exactly....Microsoft could pay them 20Billion and still keep going strong. What we need is stronger anti-trust laws...there are getting to be too few companies in charge of everything.

Re:Piffle

[Tweak232]

Perhaps I could offer a solution:
If there was any way that anti-trust cases could be tried as criminal cases, it would be great. This is one way that companies can put a dent in microsoft. Did you know that in some criminal cases, they could freeze their assets. That should be crippiling to microsoft.On the other hand, it could also end up like the market fraud cases with the ceos of enron and world com. Still better than just sitting on your hands.

Re:Piffle

[robertjw]

it's hardly going to dent Microsoft. What they need is restraint or some measures with some teeth in them which raise the bar.

This attitude comes up every time we see some kind of legal penalty against Microsoft, and I don't understand it. I'm not Microsoft fan, but I also don't want to see them bankrupted by the court system. Actually, I don't want to see anyone bankrupted by the court system. Microsoft is a big influental company and a big employer. If they were fined $20 Billion it would not have a positive impact on a company.

Any way you slice it, $850 Million is not chump change. I'll guarantee the accountants and financial officers at Microsoft are not thrilled about giving up over 4% of their cash reserves to a competitor. This ruling seems reasonable to me, and if we have enough of them maybe Microsoft will see the light.

Re:Piffle

[justforaday]

If they were fined $20 Billion it would not have a positive impact on a company.

Y'see, that's where your thinking gets a little wacky. It's supposed to be a penalty, not something that benefits them...

Re:Piffle

[WhiteWolf666]

Just a note. After their various settlements, dividend, and other items, Microsoft retains about $20 billion in a cash reserve.

This does not include this settlement with IBM.

Re:Piffle

[adtifyj]

Its not important whether Microsoft notices the drop in the bank balance or not. The continual slaps on the wrist make public display of the bad practises at Microsoft, and that may make others think twice about the yummy lollies MS offers. Also, these payouts put money in the coffers of Microsofts competitors; it may be trivial to Microsoft, but it is real hard cash that allows others to keep competing.

Consider what $850M could buy IBM in terms of OSS software project funding, and the effect that will have on Microsoft.

Re:Piffle

[rajafarian]

...but I also don't want to see them bankrupted by the court system.

Well, then make them stop breaking the law!!!

Re:Piffle

[DogDude]

Well, then make them stop breaking the law!!!

How about we get some reasonable laws on the books, and get rid of some unreasonable laws.

Re:Piffle

[ssimontis]

Still, anti-trust laws seme to create an evelution sequence for companies. Look at phone companies. When the government forced the one phone company to split up, companies began to buy each other out, merge, or just go out of business. Now, there are fewer and fewer major players. Eventually, they will keep going until there are just two, and one will eventually give in to the other, and we have a monopoly again! Something like this could happen if the government decided to act, but at least we would have a while before we had to worry about it again.

Re:Piffle

[MarkByers]

But the point is that it will not at all affect their revenue stream, so since they are still making huge profits, they have no incentive to change their ways.

It's like successfully convincting bank robbers go after then letting them go with a fine of 50% of the money they stole, but letting them keep the other 50%. If they can get away with illegal activities and make a profit from it, what is the point in having a legal system at all? Surely there should be some sort of detterent to prevent them doing it again?

Re:Piffle

[Anonymous Coward]

Congrats!

You've made your self feel badass by posting yet another dimwitted MS doesn't care about X large amount of money loss.

I don't know what the fuck is it with the word 'billion' that makes clowns like you think it mean infinite.

You better get someone with a clue to tell you how far off you are with your MS cash figure...

Re:Piffle

[Hungus]

I hate to say this but Microsoft is a virtual monopoly because the majority of people want it to be. individual communities could force schools (via the elected school boards) to require use of OSS, but they do not. The result of such measures would introduce and familiarise the general population with something other than MS, but I don;t see it happening in the near future.

Re:Piffle

[Anonymous Coward]

Yeah, I'm really shedding a tear over the plight of IBM. Poor IBM, please protect them from Microsoft's monopolistic practices.

IBM v Microsoft? Talk about a tough time deciding on the lesser of two evils.

Re:Piffle

[Anonymous Coward]

It's not supposed to destroy them though. They lost a whole month of revenue (or profit, not sure) to IBM; it's plenty of punishment. But of course this is slashdot, so what do you expect other than "DEATH TO MICROSOFT"?

Re:Piffle

[AnObfuscator]

Right, but it is supposed to be a penalty on the *entity* and on those controlling the entity. a big loss like this looks bad to the shareholders, and they may more closely scrutinize the executives becaue of this.

But destroying a company -- any company -- just because of executive stratagy is very harmful to the "little people" who depend on the company for livelyhood. Should the middle-class workers really be punished just to make a point?

Re:Piffle

[Anonymous Coward]

Requiring the use of OSS would not be a poor choice as would requiring only using MS software. Requiring a mix of them, however, would be an advantage.

Re:Piffle

[ZephyrXero]

Well, this is just like people could start to boycott all Coke & Pepsi products...but they won't. Should it be legal for only two companies to own 99% of the market in soft drinks? How could a small company ever dream of competing? Almost every industry is dominated by less than 5 companies, and most of them are in multiple industries to boot. The dominant "sheeple" love to give up their freedom for convenience and screw it up for the rest of us...

Re:Piffle

[Elwood P Dowd]

Actually, I don't want to see anyone bankrupted by the court system.

Sure you do. There are companies that do more harm than good and are profitable only because they do not compensate those that they harm. Those companies should be "bankrupted by the court system". Right?

Re:Piffle

[justforaday]

You people are acting as if this is going to break the company. It's going to feel like a bug bite to them -- sure it'll sting a little bit, and it might even cause them to be a little more careful. That's it. It won't kill them. And besides, things like this are the price of using cutthroat business tactics -- sometimes you get caught and have to pay the price. As for the shareholders, it can be argued that they're somewhat complicit in the whole thing. They are the ones who have been pumping MS stocks up to the levels that they're at, where executive management and the BoD feel it's their "duty" to destroy any and all competition, thus further increasing their shareholder value. If you as a shareholder end up getting hurt by this settlement, maybe you should be paying more attention to the ethics of the companies in which you invest.

Re:Piffle

[robertjw]

There are companies that do more harm than good and are profitable only because they do not compensate those that they harm. Those companies should be "bankrupted by the court system". Right?

In a free market these companies should not exist. In theory a company can only exist if it's providing a good or service that's of value to someone. Determining if a company does more harm than good is a tricky proposition. Obviously if a company is commiting fraud or some other illegal act I believe the should be prosecuted by the criminal courts and put out of business - but this is completely different than a company being bankrupted by a civil ruling.

Re:Piffle

[robertjw]

Dammit, I meant "it would not have a postive impact on the economy"

Sorry.

Re:Piffle

[Mr. Underbridge]

But destroying a company -- any company -- just because of executive stratagy is very harmful to the "little people" who depend on the company for livelyhood. Should the middle-class workers really be punished just to make a point?

It's not just making a point. What about all the little people put out of work after MS kills companies through anticompetitive practices? It's supposed to be a deterrent to them in the future and anyone else thinking of trying such tactics. I don't think anyone's suggesting that bankrupting the company intentionally would be the preferred route, but the penalty needs to be felt.

Re:Piffle

[Locutus]

it's part of their business plan. Think about it, they make over $1 billion PROFIT per quarter on the Windows monopoly. Paying out less than that in settlements every few years is far easier then actually competing fairly in the market since they don't even know how to do THAT...

If IBM made a statement such that they were going to put the entire $775 million into GNU/Linux marketing, then THAT would cause some restlessness at Microsoft. Pulling another few hundred million out of the drawer otherwise is SOP for MSFT and not a big deal. IMO.

LoB

Re:Piffle

[MHobbit]

And a penalty is a way of encouraging them not to something they did wrong again, is it not? (Not that any other of the court cases against Microsoft have seemed to do any good either.)

Re:Piffle

[CatMan79]

Are you insane??

You are proposing to try as CRIMINALS companies and individuals that have DONE WELL. Microsoft and Bill Gates have done many millions of times more good for the world (philanthropy, jobs, economic growth, software that's useful and easy enough to use and that runs on hardware cheap enough to buy, research & development, the list goes on) than bad (competing against other companies).

I have to call you out when you propose something as ludicrous as making successful businesses criminal. You're insane and wrong.

Re:Piffle

[justforaday]

Ahhh, now that's not wacky thinking... : p

Re:Piffle

[hagrin]

And anti-trust laws are supposed to be helpful to the general public, not legislative penalties that not only effect the cost of Microsoft products, but the US economy as MSFT is a major employer. I'm not saying that they don't deserve harsh(er) penalties, but one (the courts) must balance the penalty versus the ripple effects caused by imposing said penalties.

Re:Piffle

[eikonos]

Let me get this straight: you're suggesting that if an entity has done good, then punishing it for its criminal actions would be wrong. That would mean that if a person committed a crime like assault it would be wrong to try them in court and punish them if they had previously done good things like volunteer work to feed the homeless.
That's not how it works, or how it should work. If a person or a company like Microsoft commits a crime, then they should be tried in court for that crime and punished appropriately.

Re:Piffle

[Hungus]

There is a drink called Double Cola which was developed near where my parents grew up, and still has a bottling facility nearby .. I personally do not like the stuff but it appears to have gone international now. Products can start small and grow, especially with the net niche markets can expand and become major ones. However with all the people (sheeple as you and others have so rightly phrased it) it certainly is difficult. Again, if people wanted something apart from what the "monopolies" gave it would appear and come to fruition. That they don;t should tell us something.

Re:Piffle

[jejones]

But destroying a company -- any company -- just because of executive stratagy is very harmful to the "little people" who depend on the company for livelyhood. Should the middle-class workers really be punished just to make a point?

Sorry, but IMHO it's just about impossible for any conscious person to not be aware of Microsoft's actions; none of the "little people" are innocent.

Re:Piffle

[jtshaw]

If you freeze the billions and billions of dollars in assets Microsoft has you would screw millions and millions of people. Think about all the people who own stock in that company, and the effect on the stock market in general. The financial effects of such a move could be devesting to a lot of people that have nothing to do with Microsoft's Anti-trust issues.

You don't seam to understand that Microsoft, and other public companies, are actually owned by there stock holders. It isn't just the top tier folks like Gates and Ballmer that would be effected here, it is everyone involved.

Re:Piffle

[javamann]

Let's see... Ends justify the means. Microsoft broke the law but we have cheap software. We invade Iraq but now we fight them over there instead of here.

Geez, this list could keep growing.

Re:Piffle

[Elwood P Dowd]

You obviously have no idea what you are talking about. Criminal courts prosecute humans. Corporations can only ever be in civil court. Please consider the last time that a corporation was convicted of theft or murder. (Hint: this cannot happen.)

When companies do harm, the person or company that was harmed sues them for damages. They get sued for wrongful death, or whatever. This is our system, and it is an essential part of the "free market". This is not "completely different than a company being bankrupted by a civil ruling." It is, in fact, exactly a company being bankrupted by a civil ruling. Liability is the primary way in which corporations are prevented from doing harm to others in a free market.

Re:Piffle

[Elwood P Dowd]

Wow. I didn't realize you were the original poster. You were way further off base than I originally understood.

Consider the fictional company Toxico. Toxico disposes of radioactive and inconvenient waste at a discount. They do so by packaging and selling it as Toxico Treats in your local grocery store. They make huge profits and thousands of people die.

Toxico should obviously not exist. The shareholders should never see a penny. I hope we both agree on this point.

So, certainly we should arrest and charge all of the human criminals that work for Toxico. What about all the people harmed by their products? Shouldn't they get every penny that Toxico ever earned? That's the system: They sue Toxico, Toxico settles, Toxico declares bankruptcy, and the people that were harmed get all of the money that they can out of the bankruptcy.

The *problem* with our system, in the eyes of many free market capitalists, is that the shareholders are immune from those damages. If my house falls over and kills 4000 people, I am liable. If my company (Toxico) falls over and kills 4000 people, I am not liable, due to, IMHO, government fiction. This is wrong. If a bad company is bankrupted by civil action, the shareholders should be liable for damages.

Re:Piffle

[Anonymous Coward]

Why are you blaming the legal system for their behavior, like blaming the cops because you get a speeding ticket? If they were to be bankrupted by the courts it would be because they had done something wrong in the first place no? You don't seem to understand that responsibility for any legal problems lies with themselves. Their own behavior leads to consequences, the legal system is just a mechanism for dispensing justice.

Re:Piffle

[Dutchmaan]

No it's not supposed to destroy them, BUT a threat of a REAL penalty might ACTUALLY make Microsoft change it's practices..

Up till now it's been a kind of scoff and a "whatever" whenever a government has tried to put a smack down on Microsoft's shady practices...

I want a government that actually has the teeth to do something about this problem and the INTEGRITY to stick with it...

Until then, it will just be business as usual MS style.

Re:Piffle

[robertjw]

Toxico should obviously not exist. The shareholders should never see a penny. I hope we both agree on this point.

OK, I'm with you now. Yes, in your example it makes sense that the courts should take all of Toxico's money and not allow them to do business in the future. Guess what I was trying to originally get across is that losing a month's revenue for behaviour that may or may not have caused the demise of IBM's OS/2 is probably a reasonable sum. I don't think the courts should fine a company like Microsoft $20 Billion just because the have it in the bank. Seems like the penalty should fit the infraction and that's what the courts appearantly did in this circumstance. I don't want to see the courts specifically bankrupt a company by design. Come to think about it, I would argue that in your example Toxico should only be penalized for the amount of damage they did and what it costs to repair. This sum may be as much or more than Toxico has assets in the bank, but I don't think it's right for the court to look at Toxico's worth just to make sure they don't have any money left.

Re:Piffle

[stinerman]

If my company (Toxico) falls over and kills 4000 people, I am not liable, due to, IMHO, government fiction. This is wrong. If a bad company is bankrupted by civil action, the shareholders should be liable for damages.

+1, Insightful

Detractors would say that limited-liability corporations must exist or that old grandmas' would be liable for the actions of the corporation. I say its damn right they should! Stockholders need to play a more active role in their companies. Most people just collect dividends -- they don't care how or why they're getting a good return, they just want a bigger return. If your money goes to a criminal enterprise, you are liable. End of story.

Re:Piffle

[NanoGator]

"$850 million to Microsoft? Pfft! They've probably lost that much on XBox sales and they're still going."

If IBM was seeking compensation instead of punitive damages, then MS's net worth doesn't matter in the slightest.

Not that it matters around here, though. Microsoft is evil so the gov't should just take all their money away.

Re:Piffle

[NanoGator]

" It's supposed to be a penalty,"

Really? Then why'd IBM settle?

I'm actually quite surprised at all the yip yapping over MS not being 'punished' badly enough without noticing the word 'settlement'. It was about compensating IBM, not bending Billy Boy over a barrel and flogging him.

Re:Piffle

[CatMan79]

That's not what I'm suggesting.

I'm saying it's wrong to punish success as a crime. The reason why there are anti-trust laws is because once a company gets large enough to be able to use predatory tactics to stifle any possible competition the economy as a whole is harmed. However, in all cases by the time a company has reached that status they have done incalculable good for the economy. To turn around at that point and say, "Ha! You're now too big and might be bad for the economy. Time for jail!" is preposterous.

It's a different story in the case of a company like Enron because they broke laws. The grandparent post was describing criminal prosecution on the basis of being too big.

Competition leads to a winner, a winner can become a monopoly, and a monopoly might need to be broken up to foster more competition. It's a cycle impossible to avoid without crippling government regulation in an industry with increasing returns to scale. (Regulation is a fine way to stifle innovation and progress; is that what we want in the software world?)

Re:Piffle

[Elwood P Dowd]

Come to think about it, I would argue that in your example Toxico should only be penalized for the amount of damage they did and what it costs to repair. This sum may be as much or more than Toxico has assets in the bank, but I don't think it's right for the court to look at Toxico's worth just to make sure they don't have any money left.

Absolutely. I just used that example because it seemed clear that Toxico would have done a large enough amount of damage that the number would definitely exceed their net worth. Otherwise, feeding people radioactive waste would be a great business model.

Re:Piffle

[Elwood P Dowd]

Er... I'm going to double respond again.

I'll point out that punitive damages can also serve a valid purpose, and it may be very reasonable to penalize a company further than the specific damage that was done in this particular instance. For example, it may be very expensive and difficult to litigate certain damages, so Toxico could count on further victims failing to sue. This is not make their enterprise acceptable, so it is fine to charge them punitive damages to discourage them from harmful activity in the future.

Still, no, it's not right for the court to look at Toxico's net worth just to make sure they don't have any money left. Unless they've declared bankruptcy, in which case that's exactly the court's job :)

Re:Piffle

[Elwood P Dowd]

The free market would quickly move to serve shareholders that cannot research all the activities of their portfolio. Our coupon clipping grandmothers would buy portfolio insurance that would insulate them from damages but would pay for harm done by a company, like homeowner's insurance. Also like homeowner's insurance, it would be more or less expensive based on the risk inherent in the particular company, and this added cost to shareholders would make companies more responsive to their risk.

Re:Piffle

[soulhuntre]

I have to call you out when you propose something as ludicrous as making successful businesses criminal. You're insane and wrong.

Thats ok - the other changes many of these types want will insure no business could succeed.

They want to be able to sue any company for a bug in code.

They want to be able to steal any intellectual property they want without compensating (music, movies, media)

They want to force companies to give away the source for their products

Basically they would destroy the ability of technology companies to make money - so the question fo a monopoly won;t be a problem :)

Re:Piffle

[eikonos]

You're trying to confuse the issue of committing a crime with being successful and doing good deeds as if those things somehow negate committing the crime.
I didn't say they should be punished because they are successful, I said they should be punished if they committed a crime despite the fact that they may also have done good things.

Re:Piffle

[hesiod]

> if people wanted something apart from what the "monopolies" gave it would appear and come to fruition. That they don;t should tell us something

What it tells me is that the big ones spend so much to ensure you can't get the other options:

• Coke & Pepsi spend so much on advertising that you see their logos everywhere and the smaller ones get lost in the noise.
• C&P lock some stores/restaurants/whatever into selling only one or the other, or refusing discounts if they have the other (although many of those restaurants would not carry both anyway, as it would cost too much)
• Coke, at least (dunno about Pepsi) gets the kids hooked early with their sugar-vending machines in schools, parks, etc.

Anyway, I don't care about Coke & Pepsi too much at the moment, there are much bigger problems than which of those nasty brown liquids is better.

Re:Piffle

[geekee]

"$850 million to Microsoft? Pfft! They've probably lost that much on XBox sales and they're still going. Good thing they've got all those insanely profitable divisions and that $40 billion + cash reserve.

Of course IBM could, as the news suggests, hit them again for more money, it's hardly going to dent Microsoft. What they need is restraint or some measures with some teeth in them which raise the bar."

Who mods this crap up? Why don't you buy some stock in MS, and then see if you like arbitrary billion dollar judgements being passed against them based on vague laws that you don't know you've broken until you've been convicted.

Re:Piffle

[gilgongo]

> I hate to say this but Microsoft is a virtual
> monopoly because the majority of people want it to be.

That doesn't make much sense to me. The fact that Windows is installed by default on almost all new consumer desktop machines hardly supports the notion that people are "choosing" to run Windows over any alternative.

Most people don't know, or can even conceive of, different software and operating systems other than those made my Microsoft. So the notion of "wanting" Microsoft products is pretty meaningless in that context.

Re:Piffle

[datastew]

Does anyone know of a mutual fund that does not and will not invest in Microsoft? I moved my IRA from one fund to another due to their heavy investment in M$, only to have the new fund later do the same thing.

-datastew

Re:Piffle

[drsquare]

That's over 2% of their cash. Just for a single settlement. Not exactly a good result. It won't kill them, but it's another rusty bolt falling out of the Microsoft machine.

Re:Piffle

[Hungus]

A lack of action is as much proof of support as anything. You seem to be missing the whole issue. Things could change if people wanted them to. If the majority of people did not want windows then do you think Michael Dell would pay 15 bucks a machine to have a license for all those machines he sells? No he would keep the price the same, ditch windows and pocket the difference.

Re:Piffle

[lsdino]

If my house falls over and kills 4000 people, I am liable. If my company (Toxico) falls over and kills 4000 people, I am not liable, due to, IMHO, government fiction. This is wrong. If a bad company is bankrupted by civil action, the

This isn't the problem. Limited liability is actually a very good thing. Without limited liability it would place a much higher burden upon investors and therefore less people would be inclined to invest. And it could potentially be enough risk that investment generally didn't happen. That'd make it extremely difficult for people to create new businesses and that'd generally be bad.

The *problem* with our system (where our system == the US system) is that we do not extract sufficient reward for this mighty benefit that we give companies and investors. In fact we go so far as to treat companies as individuals with nearly all the same rights. But corporations get this huge benefit over your average person. If some imaginary business owner doesn't incorporate they can't limit their liability. Today they'll just go ahead and form their limited liability corporation for some small fee and be done with it. It'd be better if there were some trade offs involved where society gets some benefit out of the advantages it's providing to the business owners.

Because corporations shouldn't really be individuals those restrictions could include things like restriction (or elimination) of political speech, providing some free or discounted services to the government and/or societies most helpless, etc... The balances there could change over time as societies needs change - but it's always a choice for the corporation. They're trading the investment & legal benefits off for restrictions and stipulations of their business (they continue to be able to act independently & freely, of course). The best part though is that this could help free up many of these restrictions that are now getting applied to individuals as well.

Re:Piffle

[Anonymous Coward]

Good morning. Investing in a corporation as a shareholder is about getting money without doing any real work... why should I care if people lose that money?

To say that Microsoft has done "good" for the economy is just to say that they have created a software empire that people must pay into, and that money is then redistributed to Microsoft employees, shareholders, consultants, etc. The money would otherwise remain in the pocket of the purchaser to pay for other, likely more efficient entities.

To say that Microsoft is philanthropic is to argue that it is better to give your $100 to Microsoft so they can invest $10 in the charity they please (and don't forget, a "foundation" may siphon off some of its money for good but it is also one big fat tax break guaranteeing money for your inheritors), rather than keeping your $100 and investing in the charity you please.

The voluntary redistribution of wealth to Microsoft or any other corporation through trade is not intrinsically good or bad for anyone-the question is what that corporation gives the people who live with it.

Re:Piffle

[rajafarian]

How about we get some reasonable laws on the books, and get rid of some unreasonable laws.

Can't argue with you there.

Translated into English...

[jd]

Microsoft will agree that OS/2 was murdered in the dark, if IBM agrees to install $75 million dollars worth of Windows products.

And this helps which company, again?

Re:Translated into English...

[BarryJacobsen]

IBM agrees to install $75 million dollars worth of Windows products

If IBM was smart they'd take that credit in the form of hardware. Microsoft makes decent mice and keyboards (new mouse and keyboard for every employee?) and the xbox and soon to be released xbox360 (maybe give them to employees as a bonus, or sell them cheaply), and taking the credit in hardware would hurt MS's bottom line a lot more than 75 million dollars worth of software.

Re:Translated into English...

[jd]

$75 million dollars of X-Boxes later, IBM's workforce turnout drops to 0, IBM goes bust. Still helps Microsoft! :)

Re:Translated into English...

[JDevers]

You definitely have a point, but taking $75M in xbox 360's wouldn't hurt MS as much as you may think. Now MS DOES take in on the nose with the hardware ( I think I read that they are projected to be in the red about $75 on the consoles at intro), BUT if IBM then gives those out to employees MS has a pretty big upside. Right off the bat, those are people who will NOT hold out for the PS3, plus since they were GIVEN the XB360, they are far more likely to buy a bunch of games.

What IBM should do is either take it in mice and keyboards and then redistribute them with their own stuff or take them in XB360s and just keep them ;)

Re:Translated into English...

[NighthawkFoo]

Why not just use the $75 million in Windows licenses to offset the money that they already spend on them? IBM sells a lot of Microsoft software, either bundled with the hardware, or as part of a solution. This line of credit is essentially adding $75 million to the bottom line.

Re:Translated into English...

[Anonymous Coward]

$775 million in cash might help to take the sting out of things a little for IBM. (And I wonder who has to sign that check at MS?)

Re:Translated into English...

[tshak]

Microsoft will agree that OS/2 was murdered in the dark

Agreeing to settle is not admitting guilt. Even with the large sums at hand there's a point where it's cheaper to settle than to drag things on.

I recall OS/2 Warp having its own set of problems. At the time I worked for a software retail store and OS/2 Warp was probably the most returned product the first couple of weeks it came out. Complaints ranged from "constant crashes" to "severe data loss". Win95 wasn't perfect, but we didn't have nearly the number of complaints. Even if MS's discriminatory pricing was truely illegal (they weren't a monopoly at the time), I don't think OS/2 needed any help dying. The people didn't want it regardless of the price.

Re:Translated into English...

[Anonymous Coward]

And this helps which company, again?

SCO.

I won't be surprised at all if one of the confidential clauses is that some of the $700MM get used to settle peacefully with SCO before the GPL's proven.

Re:Translated into English...

[Anonymous Coward]

how about take the Xbox 360's and have a "smash an XBox" day where employees get to smash up $75M worth of XBoxes. Of course, they will take out any reusable components such as hard drives and do something with them.

Of course there is the other option of a Beowolf cluster.

Re:Translated into English...

[adam31]

I wonder if IBM will fall for the same trick in its suit with SCO?

The fork lift pulls up to the front steps of IBM headquarters and unloads several large crates marked "OpenServer 6". Crouched inside, Darl waits patiently, grinning, knife in hand. Hoping. Praying they take the bait...

Re:Translated into English...

[Anonymous Coward]

OS/2 Warp was great, I never saw any problems that weren't created by the user. One person did complain of "severe data loss" though, but it turned out they tried to install it over an existing DOS installation or whatever they had and formatted the disk in the process. I guess that's severe data loss. I don't think I don't recall ever seeing OS/2 crash though.

Re:Translated into English...

[BarryJacobsen]

I'd wager IBM has a site licensing deal of some sort and doesn't license each individual computer. I'd also imagine they get a pretty decent volume discount to where if they spent one million dollars a year for windows licenses I would be surprised. 75 years of running Windows is a long time. Longer than I think Windows/computers in their current form will be around.

Re:Translated into English...

[mr_zorg]

I won't be surprised at all if one of the confidential clauses is that some of the $700MM get used to settle peacefully with SCO before the GPL's proven.

I would. IBM likes the GPL...

Re:Translated into English...

[charlieo88]

That's because you are looking at when it was flopping around on the ground gasping. The knife went in between 1.2 and 2.0.

Re:Translated into English...

[mobilebuddha]

it's not that IMB likes GPL, it's the fact that IMB likes what GPL does for its business. Another way to look at it, IMB's executives convinced the board that going w/ GPL will make them more money in the end.

Re:Translated into English...

[geekee]

"Microsoft will agree that OS/2 was murdered in the dark, if IBM agrees to install $75 million dollars worth of Windows products.

And this helps which company, again?"

Nice red herring. What about the other 3 quarters of a billion dollars MS has to pay IBM simply becuase MS beat them in a free market.

Re:Translated into English...

[NutscrapeSucks]

No, the knife went in pre-1.0, when IBM decided to build a 80286-based OS for mainframe customers and pretended that it would be a replacement for DOS/Windows.

Still, regardless of the numerous problems with OS/2 and it's marketing, Microsoft's predatory OEM contracts were an undeniable fact, and IBM deserves their piece. (MS signed their first consent decree in 1994.)

Re:Translated into English...

[charlieo88]

Naw, that was just a mistake. IBM makes a ton of those. And pre-1.0, windows didn't exist.

Re:Translated into English...

[ClosedSource]

Well, if IBM was really so pro F/OSS they wouldn't have agreed to this part of the settlement.

This just proves that IBM is planning to use MS products for many years to come.

Re:Translated into English...

[NutscrapeSucks]

Windows 2.0 and OS/2 1.0 were released within a month or two of each other. OS/2 PM came some years later.

What about everyone else?

[It doesn't come easy]

In the course of the U.S. Justice Department's antitrust suit against the software giant, the government claimed that IBM suffered from Microsoft's discriminatory pricing and overcharging practices, according to a Microsoft statement released Friday.
And what software competitor didn't suffer from Microsoft's discriminatory pricing and overcharging practices?

Speaking of the U.S. Justice Department's antitrust suit against Microsoft, what I want to know is: Has the Microsoft approved penalties for the antitrust trial they lost fulfilled the requirements of antitrust law?

The law requires that a remedy:
Stops The Unlawful Conduct
Prevents Recurrence Of Unlawful Conduct
Restores Competitive Conditions To The Market

Has this happened? What's your opinion?

Re:What about everyone else?

[ZephyrXero]

doubtful...

Re:What about everyone else?

[jd]

Microsoft declared monopolies to be the new standard.

Re:What about everyone else?

[adtifyj]

If that is the requirements of antitrust law, then it is understandable that antitrust cases are only slaps on the wrist.

Stops The Unlawful Conduct

Antitrust is a civil matter, and business operations are a very dynamic problem. A suitable outcome could be: We fired the person responsible. Of course the position would eventually be filled by someone with the same objectives.

Prevents Recurrence Of Unlawful Conduct

This is similar to the first; Judges are not business consultants, providing guidance on how a company should alter its future practises. Judges cant rule: For 3 years the company motto will be "Don't be evil".

Restores Competitive Conditions To The Market

This requirement would nesitate a economist provide the judgement!

The outcomes of anti-trust should be similar to SEC powers, and escalate with repeat offenses:

• Provide a large disincentive; like the current payouts to competitors,
• Force the business to undertake measures to rectify the market changes they have made.
• Bar the entity from a section of the market for a period of time.

Re:What about everyone else?

[Anonymous Coward]

This is /. What do you think everyones opinion here is? People here would be cheering if they made working for Microsoft a criminal offence.

Re:What about everyone else?

[Anonymous Coward]

What, I get diddly swat, and IBM gets most of their losses back, minus a lot of compound interest and foregone opportunity.
IBM reclaimed some of their manufacturer costs, but the people who bought the product retail, suffered bigger losses - and have got no similar compensation.

The four points have NOT been addressed. You really wonder how the Digital/Compaq/HP thingy may have unfolded, had real effective action been taken earlier. As a consumer however, losses have been small relative to non-MS shareholders, and the death of a handful of European and Japanese concerns who might have had a chance. Let's hope some European concerns (think BRUNCH)ask for the same deal as IBM got - plus VAT and the rest.

Rah Rah!

[Anonymous Coward]

Rah rah IBM! Boo Boo Microsoft!!

That about sums up most of the posts that will be made to this article. However, I must say... is this really a good thing? 775$ million seems like piddly for a decade of monopolistic behavior, in a multi-billion dollar industry.

I wonder if IBM will pursue the hardware front as well.

$850 million?

[Anonymous Coward]

Were the litigation costs even lower than that?

IBM freed up by sale of PC division

[PornMaster]

With the sale of their PC division to Lenovo, IBM's been in a much less delicate position with Microsoft, not having nearly the same volume of MS software in the low-margin space where sweet deals are really necessary and the difference of a few bucks on a copy of XP means a lot in terms of the ability to turn a profit.

I get the vibe that MS knew that IBM had brought itself into a far stronger position WRT MS, and decided not to put up a fight.

Re:IBM freed up by sale of PC division

[Anonymous Coward]

"IBM's been in a much less delicate position with Microsoft"

That would be putting in mildy.

With IBM dumping Lenovo, they have effectively purged a cancerous Microsoft division residing withing IBM itself.

Hopefully we will see this start to happen on smaller scales across the business computing world where many companies effectively have their IT department acting as an extension of Microsoft.

Re:IBM freed up by sale of PC division

[NutscrapeSucks]

This is probably somewhat true, but IBM still is involved with Microsoft in the server space and no doubt does a ton of MS-related business in consulting/services.

(A story on NPR implied that IBM Services would use the $75M of licences to sell Longhorn deployments.)

Re:IBM freed up by sale of PC division

[PornMaster]

In the consulting and server spaces, there's enough margin to absorb paying what everybody else does. On a $700 desktop, that's not the case.

Yes, they have to have a relationship with Microsoft, but not so much the OEM type.

On A Side Note

[Cylix]

Windows license costs have soared dramatically.

When asked what was the primary reason for the cost inflation, a Microsoft spokesman was quoted as saying, "Were going to fuck IBM every little bit we can."

Re:On A Side Note

[Anonymous Coward]

And an IBM executive was seen secretly laughing, as he pointed out that IBM no longer sells computers bundled with Microsoft Windows.

(Well, ok, technically they sell other people's computers with Windows, but the point is IBM isn't paying Microsoft anything for Windows licenses except for those used by IBM employees.)

Re:On A Side Note

[Anonymous Coward]

you are the biggest idiot known to man...

A Microsoft spokesman would not say something like that... especially outside of a closed company executive boardroom..

too bad they don't sue you for slander... I'd like to see YOU go bankrupt you jackass

Sad

[Anonymous Coward]

that a company can pay another company money to drop its charges and not calling it a bribe.

Re:Sad

[rewt66]

It's called a settlement. That's where you do something that the other side finds acceptable, and they don't sue you. If they have a legitimate court case against you, both sides can win from this. And society wins, too, because they don't have that particular case clogging up the courts.

Insightful? Hardly. More like clueless...

$775 million cash is in the form of vouchers

[Anonymous Coward]

For XP upgrades, SQL server and quite a few licenses for MS BOB which the Notes team will use as a UI guide. IBM will be pissed, but the lawyers mad a few bucks.

Good...

[HellYeahAutomaton]

Now IBM can rehire some of the 13000 workers it just laid off.

Re:Good...

[kayak334]

Nice troll.

Re:Good...

[Anonymous Coward]

Now IBM can rehire some of the 13000 workers it just laid off.

yeah, right...

Does this mean IBM will switch to the CDDL too :-)

[Anonymous Coward]

Microsoft bought Sun's soul for a around twice that ammount (2 billion), and Sun practically walked away from the entire Chinese market.

Wonder how much loyalty this billion dollars will by from IBM. A SCO settlement?

Here's to hoping IBM doesn't back down too easily.

What a bunch of hypocrites.

[Anonymous Coward]

When Sun settles their case, they are selling out.. When IBM does... it's time for a fucken parade?!!??!?!

Re:What a bunch of hypocrites.

[Locutus]

Do you see the IBM exec bent over onstage with Bill or Steve? Will you see IBM turn around its current plans for using GNU/Linux and opensource? I don't think so.

As a matter of fact, it's likely that you'll see IBM take that $775 million and dump it into it's GNU/Linux and open source initiatives.

There is a difference between IBM and SUN.

LoB

Harm to servers

[VeganBob]

IBM's claims of harm to its server hardware and server software businesses are not covered by the settlement, however.

That is provided free-of-charge by Microsoft Windows Server.

Settlement blah settlement blah blah

[Hachey]

I would suggest that the submitter next time use Theasurus.com for all his synonym needs.


--
Check out the Uncyclopedia.org :
The only wiki source for politically incorrect non-information about things like Kitten Huffing and Pong! the Movie !

Re:Settlement blah settlement blah blah

[Anonymous Coward]

And I would suggest you read your own posts, as if you had you might have noticed your rather humourous spelling mistake.

Re:Settlement blah settlement blah blah

[Hachey]

posting on /. is really the best spelling lesson for me these days. ;)


--
Check out the Uncyclopedia.org :
The only wiki source for politically incorrect non-information about things like Kitten Huffing and Pong! the Movie !

My Rights Online...

[motek]

How Microsoft's payout to another big company relates to my rights? I mean - this is not an admission of wrongdoing, it is just a money transfer.

Re:My Rights Online...

[youknowmewell]

I suppose this is just a matter of categories that are too specific, with YRO being the closest to the intended category.

Microsoft dollars...

[alexhs]

$775 million payment to IBM and a $75 million credit toward Microsoft software

In other words, 775 million USD and 75 million MSD...

Re:Microsoft dollars...

[tped]

There are a lot of desktops in IBM Land ... I wonder if those Microsoft Credits will affect IBM's plans to put Linux on internal desktops?

Remember this one? http://www.theinquirer.net/?article=13485

A drop in the bucket

[RealProgrammer]

At $11.24B/year, they make that much in a single month.

With SmartSuite out of the way, their Office package is the basically the only commercial offering out there. Microsoft's predatory, monopolistic practices easily made the company $850 million this year, and they've been doing it for a lot of years.

Some days, my faith in the system is tested.

Re:A drop in the bucket

[owlstead]

Ehm, why wouldn't OpenOffice (or StarOffice if you wan't to pay for it + advanced spell checker) count as a competitor to Microsoft Office?

Re:A drop in the bucket

[NanoGator]

"Microsoft's predatory, monopolistic practices easily made the company $850 million this year, and they've been doing it for a lot of years."

Actually, it was Microsoft's practice of making products people want that made them their money. The difference? You can't make money on monopolistic practices without a product in high demand. ... not that I expect anybody here to notice the difference and understand why it's significant. The concept of a 'de-fact monopoly' just isn't easy to process when talking about Microsoft. Afterall, it's common knowledge around here that one day, suddenly, Bill Gates personally went to several computer retailers, put a gun to their heads, and demanded they ship Windows.

Re:A drop in the bucket

[Marthisdil]

Selling software is predatory and monopolistic? Where's all the OpenOffice fanatics pushing for companies and individuals to stop buying?

Oh, wait. Another example of alternatives that are out there, that people aren't adopting, thus, it's MS' fault.

Amicable

[MECC]

"IBM is pleased that we have amicably resolved these longstanding issues,"

Money is oh so amicable.

Raises for everybody

[ArsonSmith]

Now all the IBM workers that have been working at deflated rates due to this problem will get huge bonuses and raises.

Re:Does this mean IBM will switch to the CDDL too

[Anonymous Coward]

Wonder how much loyalty this billion dollars will by from IBM

Grammar nazi says:

"Wonder how much loyalty this billion dollars will buy from IBM"

"buy" is a verb.
"by" is a preposition.

Yet this isn't enough

[EMIce]

I believe one facet of this case was Microsoft's intentional breaking of Win 3.1 under Dr. DOS, which had a decent marketshare and better product at the time. They wouldn't be out-designed so they decided to play the bully. Like a kid who wants something so bad he takes it when no one is looking.

Good for IBM, though the market has still not recovered - but yet we've got these goons in Washington taking fat checks to keep the monopoly going strong. This is no small problem, and it is only going to get worst without some corrective action from congress.

Re:Yet this isn't enough

[Anonymous Coward]

"Microsoft's intentional breaking of Win 3.1 under Dr. DOS"

Do you have a source for this? I have only heard that there was a bug with real-mode Win3.1 on Dr-Dos and a error message on some beta version of Win 3.1.

Re:Yet this isn't enough

[EMIce]

Well, my source is my memory, but I dug up this article from The Register. To quote:

Of course there was no reason for this. Brad Silverberg, the Microsoft exec who finally left the company last week, but who in an earlier life had been responsible for Windows 95, emailed Allchin on 27 September 1991: 'after IBM announces support for dr-dos at comdex, it's a small step for them to also announce they will be selling netware lite, maybe sometime soon thereafter. but count on it. We don't know precisely what ibm is going to announce. my best hunch is that they will offer dr-dos as the preferred solution for 286, os 2 2.0 for 386. they will also probably continue to offer msdos at $165 (drdos for $99). drdos has problems running windows today, and I assume will have more problems in the future." Allchin replied: "You should make sure it has problems in the future. :-)'"

There is also talk in the article of the specific parts in Windows 3.1 where the incompatibilities were introduced.

Re:Yet this isn't enough

[Anonymous Coward]

From that article "The message generated if DR DOS was used with Windows 3.1 betas was: "Non-fatal error detected: Error number [varied]. Please contact Windows 3.1 beta support." says that a _beta_ version of Win 3.1 display an error message on DR-Dos.

But did the _release_ version ever display a message?

Intel should worry... AMD suit

[phorest]

From an AP article explaining the basis it sounds possible AMD might prevail if the same standard is applied... let's hope so!

The payout is one of the largest that Microsoft has made since U.S. District Judge Thomas Penfield Jackson ruled in 2000 that Microsoft engaged in anticompetitive practices. Jackson's ruling cited IBM as a company that Microsoft had forced to "desist from certain technological innovations and business initiatives."

For example, Microsoft didn't charge all computer makers the same amount for its Windows operating system, allegedly using higher prices as a cudgel against PC companies that didn't comply with Microsoft's wishes

Re:Intel should worry... AMD suit

[aardwolf64]

This case was settled, so no legal precedent was set. Intel should worry, but not because of this result...

Where's the beef?

[scribe165]

Can anyone explain the case IBM had against MS without a lot of anti-MS fanaticism or legal jargon? In fact, I'm a little fuzzy on where the line lies that divides good and effective business practices from evil monopolistic ones. This has been going on so long that it's difficult to figure out why exactly the anti-trust suites begain in the first place. And even though I don't care for their software, I think it would be only fair to understand why MS is being charged for what, in many cases, seems like promotion of their own product, which is just business. Can anyone explain, sans flamethrower, why MS is being hit with these suites?

Re:Where's the beef?

[Anonymous Coward]

suite (sw[long e]t)
n.

1. A staff of attendants or followers; a retinue.
2.
1. A group of related things intended to be used together; a set.
2. (also s[long u]t) A set of matching furniture: a dining room suite.
3. A series of connected rooms used as a living unit.
4. Music.
1. An instrumental composition, especially of the 17th or 18th century, consisting of a succession of dances in the same or related keys.
2. An instrumental composition consisting of a series of varying movements or pieces.
5. Computer Science.
1. A group of software products packaged and sold together, usually having a consistent look and feel, a common installation, and shared macros.
2. A group of procedures that work cooperatively: The TCP/IP suite of protocols includes FTP and Telnet.

Re:Where's the beef?

[Anonymous Coward]

When IBM and MS were working on OS/2 v2, MS split
and started development of Win95 and WinNT. MS stopped helping but IBM was licensing API from MS on OS/2 itself plus using win 3.1 inside OS/2. MS doublecrossed IBM with making win95 not capatable to OS/2. Win NT file system was IBM's HP Filesystem twisted so IBM OS/2 was again incapatable. IBM stayed the course and developed OS/2 Warp (AKA OS/2 version 4.0) without MS help.

Re:Where's the beef?

[Anonymous Coward]

> making win95 not capatable to OS/2
> IBM OS/2 was again incapatable

you keep using that word. I do not think it mean what you think it mean.

inconceivable!

that's one tall stack of cash

[Surt]

50 miles high in dollar bills. 2700 feet in hundreds.

Microsoft wins again

[Weaselmancer]

Microsoft will pay IBM $775 million cash in addition to $75 million in credit.

To MS, $775M is not that big of a deal. But having IBM get $75M worth of stuff from them is. Even if it's on credit. Remember - MS makes it's money off of mindshare. And having IBM who has rather recently and somewhat famously embraced Linux suddenly get $75M of free MS stuff is a huge win for MS.

I'll bet if the deal had been on the table to simply pay IBM $775M to accept $75M in MS products, MS would have gone for it. They'd pay that much to have $75M worth of mindshare suddenly implanted into one of the largest Linux players out there.

Re:Microsoft wins again

[ID000001]

Not neceassary.
They could always just buy 75$ millions of Optical mouse and keyboard. Or whatever hardware microsoft dare to come out with that will work fine with Linux.

Re:Microsoft wins again

[Hollins]

If IBM considers $775M adequate compensation, then the $75M MS credit is irrelevant. They don't have to use it, and can choose not to.

If they want to take a poke at MS, though, they could set up an amnesty program, such that when any company is being muscled by the BSA, funds from the $75M are used to bring that company into compliance for past use, possibly in exchange for adopting IBM software in the future.

Re:Microsoft wins again

[poot_rootbeer]

But having IBM get $75M worth of stuff from them is. Even if it's on credit.

Who says IBM ever has to USE this new $75M line of credit?

Naturally, they will, because an organization the size and breadth of IBM is going to have some Windows-based components in it. I don't see it following that IBM will have to promote Windows mindshare to its end-users, though.

Re:Microsoft wins again

[Sloppy]

And having IBM who has rather recently and somewhat famously embraced Linux suddenly get $75M of free MS stuff is a huge win for MS.

And in other news, IBM employees are reporting that they all love their new mice.

Re:Microsoft wins again

[ciroknight]

I don't think it's as big of a deal as you are saying. After all, even if they are known for having a huge embrace of Linux over at IBM, they also sell Microsoft products on their servers (now who'd buy those servers, I dunno, but they do sell them).

Basically, what they've done is dropped the cost of Microsoft on those boxes, increasing their profit margin. Of course, this can even go internally; they don't nessicarily have to sell those licenses they just got their hands on. They can use it on their own products or give them to their employees or whatever the hell they want to do with them, including selling those vouchers to Lenova for a petty price of $10 Million (that'd be my move; show how worthless Microsoft really is by giving away their software at a HUGE discount).

All this settlement really means is that instead of giving up closer to a billion dollars, they decided to lick their wounds and give up a few licenses (which cost them less in the long run). IBM must have been apt to accept, as $75 million in Microsoft money is money to burn.

Re:Microsoft wins again

[owlstead]

Even though IBM is betting on Linux as well (mainly for servers currently, but that might change) they still have a lot of Windows and Office installations, even in house. What is to say that they will use 75M on *new* licenses? Why would they not use this amount to pay of old license fees or upgrade to new ones?

I would call loosing a total of 850M to IBM to put in to their warchest not a victory - actually it is a pretty big loss. Actually, in the areas where they compete, IBM has now 850M more as well as they have 850M less.

For Microsoft it's still a win situation if you look at it in the right timescale. For now they loose money.

Re:Microsoft wins again

[Junta]

Not so much as betting on Linux as trying to be loud that they embrace it.

Now that they sold the PC division, the lowest-end they go is workstation, which they support linux in just like servers (well, technically, point of sale equipment is more low end, but that mostly runs linux too...) From zSeries down to Intellistation, it is tested, but to some degree feels like a second hand citizen to Windows where applicable (except in special circumstances, like x86 based cluster solutions).

To their credit, the pSeries servers at least seem to treat Linux very well and not treat it worse than AIX in terms of support...

Re:Microsoft wins again

[swillden]

And having IBM who has rather recently and somewhat famously embraced Linux suddenly get $75M of free MS stuff is a huge win for MS.

Nahh. It just means that IBM won't pay Microsoft for a few years. Keep in mind that as much as IBM is aggressively pushing Linux, nearly every one of IBM's over 300,000 employees has a PC running Windows. And most of them have MS Office, many have MS Project, etc. IBM buys plenty of Microsoft software.

Or used to, anyway. By the time IBM has spent all of the $75M, they'll probably have managed to move the organization off of MS stuff.

It's not a win for MS. It's just lost revenue, pure and simple, because IBM would have bought the MS software anyway.

Re:Microsoft wins again

[unitron]

Better yet they should take it all in whichever X-box is the hot new release when they finally actually get the $75 million gift certificate and then turn around and eBay them cheap so that retailers have to drop their prices to compete and pressure MS to drop the wholesale price so that MS loses even more money on them. The cheaper the console gets the more outrageous the high game prices appear so game sales slip or prices have to come down and MS loses licensing fees. Everybody wins except MS.

GPL OS/2

[tmbailey123]

Does the resolution of the OS/2 dispute mean that IBM is free to release OS/2 under a GPL license without fear of M$oft legal action ?

Re:GPL OS/2

[squiggleslash]

Unlikely. The OS/2 thing concerns Microsoft's attacks on IBM during 1995 when IBM started making a serious attempt to market OS/2. This culminated with IBM not getting what they needed to test Windows 95 on their own machines until the night before release, and having to pay retail for copies. IBM capitulated and dropped all marketing of OS/2 and Lotus Smartsuite in return for getting the same treatment as companies like Dell, Compaq, and Gateway were getting.

My guess is Microsoft basically said: "Ok, we'll give you lots of money, and if you want, you can start marketing OS/2 again... but hold on... nobody's going to want to buy OS/2, not now in 2005, and you don't make PCs any more so you can't bundle OS/2 with them, so, this doesn't mean a whole lot now does it?"

Re:GPL OS/2

[tmbailey123]

Seems like the argument would suggest there is no reason not to release the code as an opensource project.

I had heard that the reason why OS/2 has not been GPL'd is there is proprietary code that M$oft wrote and still holds the rights to those lines of code in OS/2. (Another SCO Novell type squabble)

I think it would be very interesting to see many of the GPL'd apps out there ported to OS/2. OpenOffice, GIMP, Apache.

While it has been 15+ yrs I remember OS/2 as having a very nice desktop and would be another excellent Windbloze alternative.

Re:GPL OS/2

[squiggleslash]

Well, you hit the nail on the head with your second sentence: some of the code in OS/2 was indeed written by Microsoft. While IBM may have the rights to sell OS/2, they may have problems getting permission to distribute the source code without Microsoft's additional permission. Microsoft is probably only one of the contributors too.

This is precisely why proprietary software sucks - it's viral!

Re:GPL OS/2

[tmbailey123]

True, true,

I was hoping that perhaps IBM would have included release of the OS/2 code in their settlement terms.I think by this time M$oft would probably have agreed to the request just to get this litigation over with.

Guess we couldn't get that lucky.

Re:GPL OS/2

[NutscrapeSucks]

Why would IBM do anything to enhance OS/2? They make good money selling expensive migrations.

Wow! Pocket Lint!

[Anonymous Coward]

Gee! $850 Million! M$ had to dig deep under the couch cushions in the guest room and plow through who knows how much pocket lint! This is really newsworthy! It's almost as I were forced to buy a container of mosquito repellent on a hot summer day! This will make them think twice ... uh, uh, [running out of steam]

I guess things look good for AMD :)

[HerculesMO]

Hopefully the superior courts are on the same kick of large corporations taking advantage of their positions to muscle out the little guys.

I guess we'll see ...

Re:I guess things look good for AMD :)

[Anonymous Coward]

In what world are you living in where IBM is a "little guy"?

If anything this is a story about the little guy that made good and got sued by the big guy that couldn't compete.

As an old OS/2 user, please permit me to say...

[dduck]

...hahahahahaha!
hahahahahahaha!
hahahahahaha!
hahahahahahaha!
hahahahahaha!
hahahahahahaha!
Aaaa-hahahahahaaaa...
Aaaaaaa-hahahahahaaaaahahahahaaaaaaaaaaaa....

Oh well. I guess it's great for IBM that they got paid, but what about the pain of all the BSOD's that we poor users had to contend with for - oh - a decade or so, where we could instead have been using a properly multitasking, threaded and memory protected OS. :( I don't think that pain is ever going to go away (even though it *is* soothed somewhat by the niceness and comfort of OS-X these days).

Re:As an old OS/2 user, please permit me to say...

[Anonymous Coward]

Not a real die-hard, eh? OS/2 -> Linux -> OS X for me. Finally gave up OS/2 in 2003.

Re:As an old OS/2 user, please permit me to say...

[dduck]

Oh, I did use Linux for a while, and have the published glossy articles to prove it. Still a nice server OS though.

Unfortunately I make my money off win32 programs these days, but having a open mind prepares me for a shift in the market, which may (or may not) be coming.

Re:As an old OS/2 user, please permit me to say...

[Anonymous Coward]

but what about the pain of all the BSOD's that we poor users had to contend with for - oh - a decade or so, where we could instead have been using a properly multitasking, threaded and memory protected OS

I used OS/2 from the 2.0 days up until 3.1 (Warp was the last version I installed). Then I switched over to NT 4.0 (not bad, about as good as OS/2 v2 was) then up through Win2000 and now WinXP.

The only time I booted Win95 was if I wanted to play a game that wouldn't run in OS/2 or NTv4.

So... for those of us who were concerned with stability, it was possible.

And WinXP has been good to me. It probably helps that I'm using a Toshiba laptop and using desktop hardware that is on the MS list of qualified hardware. My usual up-time for WinXP on the laptop is about 2 weeks or so before I bother shutting down for a patch or a reboot.

attempt at higher visability

[scribe165]

Can anyone explain the case IBM had against MS without a lot of anti-MS fanaticism or legal jargon? In fact, I'm a little fuzzy on where the line lies that divides good and effective business practices from evil monopolistic ones. This has been going on so long that it's difficult to figure out why exactly the anti-trust suites begain in the first place. And even though I don't care for their software, I think it would be only fair to understand why MS is being charged for what, in many cases, seems like promotion of their own product, which is just business. Can anyone explain, sans flamethrower, why MS is being hit with these suites? -- age and wisdom overcome youth and treachary

Re:attempt at higher visability

[Anonymous Coward]

Bill Gates agreed to sell DOS licenses to IBM in the 1970's before he had any rights to it. He then bought the rights to it from a friend of his without telling his friend about the deal with IBM. Without knowledge of the deal his friend didn't charge him much.

In 1984 Apple introduced the MacIntosh with a GUI desktop, an idea stolen from Xerox. Microsoft responded by developing Windows as a "presentation manager" application for DOS.

From the late 1970's to the mid 1980's DOS was the only OS for IBM(compatible)-PC's, so Microsoft got very deeply entrenched in the market.

By this time IBM had developed their own OS called OS/2 with a GUI desktop available for it called Warp. Warp was ported to DOS in the late 1980's or early 1990's.

Most people continued to use DOS as the computer market took off, because it was so heavily entrenched and all of their friends were able to provide support.

Microsoft disliked the idea that somebody would use a GUI other than Windows on their DOS boxen, so starting with DOS 7, they started bundling DOS and Windows 4.0 (aka: Win 95) together. This spelled "The End" for Warp and OS/2 altogether.

During the "competition" between DOS and OS/2 Microsoft threatened hardware manufacturers (HP, Dell, Compaq, etc.) that if they continued to support OS/2, then Microsoft would terminate their licenses to preinstall DOS/Windows. Given the entrenchment of DOS/Windows if a hardware company had to sell computers without DOS/Windows very few people would buy those computers and the manufacturer would go out of business.

Microsoft did the same thing to manufacturers who preinstalled Netscape during the "browser war." If a company preinstalled Netscape, then Microsoft told them they would be prohibitted from preinstalling Windows. How many "average" users (who make up the bulk of new computer sales) are going to buy a computer without Windows?

Re:attempt at higher visability

[Anonymous Coward]

You are just back from a 15 year Space Odessey I gather.

Well, you could look at IBM's complaint.

Otherwise, try these two reasons for starters (reasons which may or may not be in the complaint) :

1)
IBM and MS were developing OS/2 jointly as the replacement for DOS. Then MS pulled out, springing this as something of a suprise. The developers had been trying out the ergonomics of the proposed OS/2 GUI by running it on DOS. Like a sports car maker might try out a new body on a VW chassis, never meant to be marketed. When MS pulled out however they not only left IBM in the lurch but took that experimental GUI on DOS with them and marketed it as Windows. They set 32 bit OS's back by about 10 years in this way - the time that Aunt Tilley and Joe 6-pack carried on using Windows-on-DOS (until XP came along).

2)
MS refused to discount Windows to PC makers who did not pre-install it (and pay for it) on *every* PC they sold. This was to prevent the makers offering OS/2 as a pre-installed option. It was also a deterrent to using OS/2 because the user had to be clever enough to install it themselves (ruled out Joe Sixpack and Aunt Tilly), and had to to swallow paying for *two* OS's - the pre-installed Windows and a shrink wrapped OS/2.

Re:attempt at higher visability

[Anonymous Coward]

"In 1984 Apple introduced the MacIntosh with a GUI desktop, an idea stolen from Xerox"

Without wishing to sound like a Mac zealot (though I do own a G5), I thought it was common knowledge that Apple paid to see the work done at Xerox, to the tune of about $1m in stock (or something like that). Which hardly counts as 'stealing'...

Yeah!

[the eric conspiracy]

So my cheque for my failed DeskStar drives is going to be funded by Microsoft. Shweeeeeet!

So SCO suit is a retaliation for this!

[RelliK]

Now I see it. SCO suit is not only about spreading fud. It's also a retaliation for/bragaining chip in this suit.

Sad

[Anonymous Coward]

that a company can pay another company money to influence a politician and not calling it a bribe but lobbying.

Cheap

[Nom du Keyboard]

Microsoft gets off cheap. While $775M is big to us, they just write a check out of cash reserves and continue on with one less legal hassle. Good deal for them.

Prevention: 0

[OwlWhacker]

The question is: What does this do to prevent Microsoft committing other anti-competitive crimes?

The answer: Nothing.

Microsoft can afford a few hundred million in order to benefit from anti-competitive actions; by the time the courts catch up with Microsoft the benefits must be immense.

I'm sure Microsoft is happy that the pros outweigh the cons. The company has continued anti-competitive practices even though it has previously been fined for similar crimes, and it always comes up smelling of roses.

Know thy enemy

[pixelfreak]

$75M in credit means that IBM will have access to a wide range of Microsoft products and technology for compatibility and interoperability testing.

In addition, several of IBM's server products, such as DB2 and Websphere run on Windows server. You don't think that Microsoft just gives IBM Windows 2003 server and MS Visual Studio licenses for free, do you?

This is money they would have likely spent on Microsoft products anyway

FOR FUCK'S SAKE PEOPLE!

[Anonymous Coward]

IT'S A SECTION HEADER! The YRO section generally does cover legal decisions which impact technology, but that doesn't mean they have to keep entirely strictly to the three-word brand name for the section every single time!

If you can't handle the idea that "your rights online" sometimes does not explicitly keep to its title, WHY ARE YOU STILL READING THE YRO SECTION? It's been running this exact same kind of story ever since it was founded however many years ago! Surely you've figured out by now this is the section where this kind of story tends to go?

Why not?

[Ungrounded Lightning]

I'm not Microsoft fan, but I also don't want to see them bankrupted by the court system.

Why not?

If they were being vindicated by the legal system, then they shouldn't be driven to bankruptcy (or inconvenienced at all) by its costs.

But if they have a consistent pattern of wrongdoing and profit from it, are consistently convicted for it, yet continue in the misbehavior because it's profitable despite the penalties, why not raise the penalties until they either stop the illegal behavior (because it beomes UNprofitable) or go bankrupt (and thus stop it by ceasing to exist)?

Judgements are supposed to do two things:
- Repair the damage to the injured party by giving him financial compensation.
- Penalize the injuring party, to deter future wrongdoing.
You'll find that distinction in the judgements themselves, which are divided into "compensatory" and sometimes "puntative" damages.

Punishments are SUPPOSED to give enough pain or inconvenience to deter future misbehavior, make illegal acts unprofitable, and make repeat offenders unable to continue. They do this by escalating when repeated convictions show the pattern continues, until they become completely debilitating.

As for the stockholders suffering losses due to the officers' choice to break laws as corporate policy: The stockholders are the ones who pick the board and vote on major issues, and the board is who picks the officers and votes on day-to-day issues. So if the stockholders pick crooks (or crook-pickers) and then keep voting to retain them, it's APPROPRIATE for them to be hit in the wallet. It's an incentive on THEM to pick some non-crooks to clean house - or dump the stock on someone who will (or is willing to take the heat) before the crooks make it worthless.

As for the economy: It got along fine without Microsoft, and can do the same again if necessary. There have been plenty of other companies (and universities, and volunteer organizations) that made perfectly usable software in the past, and in the absense of the 268 Billion Dollar Gorilla I'm sure there would be again.

Many states now have "three strikes" laws to lock up violent (or "serious") repeat offenders and throw away the key. Perhaps we need something similar for corportations.

Re:Why not?

[robertjw]

As for the economy: It got along fine without Microsoft, and can do the same again if necessary. There have been plenty of other companies (and universities, and volunteer organizations) that made perfectly usable software in the past, and in the absense of the 268 Billion Dollar Gorilla I'm sure there would be again.

Absolutely, and I don't think Microsoft will be around or as dominant as they are in the future, but the bottom line is bankrupting Microsoft would have an immediate negative impact on the economy. Billions of corporations and individuals rely on Microsoft products every day. If Microsoft suddenly went under it would be devestating.

Re:Why not?

[Anonymous Coward]

Many states now have "three strikes" laws to lock up... "serious"... repeat offenders and throw away the key.

Yeah. Such as pot smokers.

Re:Why not?

[Quino]

Actually, just the opposite. A company that hinders free-market forces *hurts* the economy.

Think of the drain MS, through monopolistically-inflated prices, has on the rest of the world through the fees associated with running a computer, and being forced to buy the OS at high cost from a single vendor. And then, because of the nature of the monopoly, being forced to re-purchase the same functionality over and over again.

I happen to think that the service MS provides as its bread and butter is of very little real value, so I have to say that I have just the opposite viewpoint: the economy as a whole would benefit tremendously from a bankrupt and non-existent MS.

All those amazing revenues that MS sees every quarter is money unnecessarily spent by companies that, on the whole, actually do produce value for a living. There is a reason, after all, why in this very capitalist of countries, MS-like behavior is *illegal*.

Re:Why not?

[robertjw]

Actually, just the opposite. A company that hinders free-market forces *hurts* the economy.

But how can a company that is part of a free-market hinder free-market forces. This is an excerpt from a definition of coercive monopoly A company which has achieved monopoly status by simply outcompeting all other firms, may exploit its position to retain its monopoly; typically, engaging in activities that result in what are commonly referred to as "barriers to entry", although it is is a matter of debate whether particular barriers to entry are coercive in nature. For example, some say high costs required to compete are a barrier to entry, but free market advocates would say that the market is still free since competition is allowed to anyone that can raise the funds to compete, and that hence it cannot rightfully by called a "coercive monopoly."

To my knowledge the complaints against Microsoft aren't complaints about extorsion or other non-economic methods of cementing their monopoly. The biggest complaint is that they have added additional features to their product to make it more usable and used the widespread use of their Operating System to market other products. Seems to me like government sanctions against Microsoft actually work against a free-market.

Don't get me wrong, I have no love for the evil that lives in Redmond either, but I want the market to force Microsoft out, not the government. I want Linux and OSX to improve to the point where there is no reason to run any Windows OS at all, and I believe that day will come.

It's more like...

[ajdecon]

Microsoft agrees it murdered OS/2, and did lots of other nasty things. They also agreed to give IBM $850 million, but managed to talk IBM into taking a tiny chunk of it in Microsoft software.

This hurts Microsoft, no doubt about it; and some chunk of IBM's workforce which hasn't yet installed the latest MS Office (or Halo?) gets to do it for free...

jeez...

[alfrin]

from the U.S. government's mid-1990s antitrust case against Microsoft

Last time I check it was late 90's.
It's amazing how news articles seem to get the most basic of details wrong.
It's sad sometimes.

Re:jeez...

[NullProg]

It's amazing how news articles seem to get the most basic of details wrong.

No, it's amazing that so many windows users don't know the history of Microsoft.

Government interest in Microsoft's affairs had begun in 1991 with an inquiry by the Federal Trade Commission over whether Microsoft was abusing its monopoly on the PC operating system market.

Review the references here:
MS vs USA

Enjoy,

It adds up...

[HermanAB]

850 million here, 500 million there, pretty soon you have real money... I wonder what is the total amount that MS has paid out in anti-competitive litigation? My guestimate is about 3 billion dollars. That amounts to about 6 million copies of MS Office.

To make it a *real* slap in the face...

[Anonymous Coward]

... IBM should immediately earmark all that money for Linux development :D

Microsoft is going down...

[letsall69]

As Neil Armstrong said: Thats one small step for IBM, one giant leap for mankind"

Death by a Thousand Cuts

[Anonymous Coward]

Individually, $850M isn't a big percentage of Microsoft's cash, but this isn't the only lawsuit they're dealing with. They have/had numerous class action suits, not to mention large settlements to people like Novell and Gateway. No, Microsoft isn't going to hemorrage cash in one settlement. They're going to pay up in chunks over multiple suits.

duh

[gremlins]

No is hasen't but then again it is no real shock that in our society today Companies get do what ever the hell they want so long as they donate enough money. Its a shame we have to wait for an Enron type catastrophe before anything happens and even then the only thing that happens is Enron gets in trouble. Our flawed system is just dusted off.

Real money

[Alsee]

Half a billion to the EU, half a billion to Novel, three-quarters of a billion to IBM, two billion to SUN, half a billion to Eolas, a billion to California...

If this keeps up it's gonna add up to real money pretty soon.

-

microsoft' credit limit

[blib-hiptop]

We now know what microsoft's credit limit is. I wonder how they calculated $75 million. Its income is about 16billion per year (iirc) so its limit is only .4% of its annual income. That seems a bit low to me. Just think of the reward points it would get though

Aside: how does one send $775M?

[abulafia]

I've always wondered about large cash tranfers like this between companies.

Does anyone know the mechanics of such a thing? I presume they don't just write a check and drop it in the mail...

The closest I've been to large scale finance is a couple of orders of magnitude short of that sort of thing (and even there, we didn't write a check), so I'm curious. Anyone know?

Re:Aside: how does one send $775M?

[HexaByte]

Just a simple wire transfer.

Of course, both sides set it up in advance so the banks know what's comming and going, but it's no different than other wire transfers.

Re:Aside: how does one send $775M?

[inKubus]

Yeah, this stuff happens daily, probably hundreds of times. Yesterday Bank of America bought MBNA for $35 BILLION which is a really big deal and actually will have a large effect on the american economy.

M$ was aided on OS/2 by IBM's CEO Lou Gerstner

[dtjohnson]

Gerstner pulled the plug on new resources going into OS/2 in April, 1996 at a time when OS/2 still had a small, but significant market share and was on the verge of releasing the much-improved v4. OS/2 was still selling a lot of licenses for v3 at the time and was a profitable business activity for IBM, although it would have certainly been much more profitable with a larger market share. IBM's OS/2 group still went ahead and released OS/2 Warp v4 in August, 1996 but it was a 'stealth' release that the IBM corporation was obviously no longer behind. There was no business reason for Gerstner to pull the plug on OS/2. You can hear Gerstner describing his decision to end new OS/2 development in an .mp3 file enclosed within this zip file.

US is self-destructing

[Anonymous Coward]

"We invade Iraq but now we fight them over there instead of here."

who are you fighting over there ? non-skilled muslim fanatic zombies. These weren't there before you went there, but they sure are now...and coming from all over the middle-east. These are yee-yah-blow-em guys...they don't kill many people and are too stupid to get a visa to the US. These are the flies.

Problem is, this 'war' is no doubt encouraging Mohammed Atta types- intelligent, shrewd and looking to cause maximum destruction. These are the terrorist entrepreneurs. So far, there has been only ONE attempt, and we all know what that was (September 11).

The war in iraq has guaranteed that enough young and intelligent muslims would be so pissed against the US that they will plan and execute spectacular attacks. These are the dragons. Meanwhile, the low-skilled-fanatics would keep blowing themselves up and cause minor problems here and then.

Good luck US of A...I'm staying out of your country...it is just too unsafe now. Ever heard of 'survival of the smartest/fittest'....well you were too dumb to exaggerate the 'war on terror' thing and have exacerbated the situation. Has it ever occured to your nation which has produced some of the smartest brains in the world that maybe, just maybe, the Sept 11 attacks were just a one-off thing ? Some bunch of people were pissed and that's what they did. How could it be inferred that some 'war' was launched upon you ?

Stupids don't deserve anything. The fanatic muslims can suffer in their foolishness and the dumb americans can suffer in their foolishness.

Now the world is anxiously awaiting the downfall of the US and the destruction of fanatical Islam. Please destroy each other so that the rest of us can live peacefully.

IBM suing Microsoft for anti-trust?

[JChung2006]

Does this strike anybody else with historical perspective as ironic? Isn't IBM the company that tried to put every other mainframe computer company out of business in their heyday with their business practices? In a parallel universe, all the Linux fanboys would be vilifying IBM and OS/2 (or perhaps Apple and MacOS), not Microsoft and Windows.

Re:IBM suing Microsoft for anti-trust?

[Anonymous Coward]

I know you're sort of kidding, but these comments come up a lot (hey, "Google will one day get big enough to be hated by geeks"), forgetting that MS stands out as being a company that's *never* been innovative or technically interesting, and hence lacks geek love and respect. That's why MS isn't respected, not just because they're huge, and not just because they hinder companies that do innovate.

I think the statement should be: "in a parallel universe, there's a successful MS that's gotten there through innovation and high quality software, and hence has the respect of geeks everywhere"

Re: Section headers should make sense, too...

[motek]

There used to be one reading 'business'. More appropriate here, methinks. Not every piece of news related to courts is about my rights. Especially when it is related to business litigation.

Who said anything about YOUR rights

[Anonymous Coward]

IBM employees read this site too you know

It's a CREDIT, not FREE NEW STUFF

[browncs]

IBM spends a large amount of internal IT dollars to outfit its employees with Windows and Office. As I read this story, the $75M is a credit for amounts already spent. Not $75M of new stuff.

ps I am an IBMer.

You should also know that IBM, internally, plans to convert at some point over to Linux and open-source based platforms for its employees. There are pilot programs already underway.

Three strikes

[dustmite]

The problem is Microsoft just calculates how much they expect to pay in fines etc. each year, and simply work it into their operating costs and into their pricing. Believe me, Bill Gates is laughing about this, all the way to the bank, because to Microsoft, this is just another cost of doing business on the balance sheet ... and like any other operating cost, they just make sure their prices cover it - so he knows it is in fact his own customers that are paying for this in the end. This is actually the worst part, because customers had already paid for the monopolistic practices, now customers must pay the fines too.

Microsoft can go on like this forever, because the very illegal practices they get fined for are what keep them in the position that allows them to charge 'what the market will bear' for their products.

What we need is some kind of 'three strikes' law for companies that operate like this. The tricky part is the remedies should not harm the customers even more - the remedies should undo the harm that customers have incurred. E.g. forcing MS to genuinely open up some of their proprietary file formats, to allow competition into that market.

I know people will argue "but Microsoft helps keep the US economy going by bringing in lots of foreign income". But ultimately it's bad for the US economy if you just keep propping up an inefficient, expensive company - because sooner or later, an efficient, nimble foreign company is going to create "the next big thing", and then the US will have nothing in that market. Rather force your companies to stay on their toes, and stay good, so that the world has a genuine incentive to stay hooked on MS software, i.e. actually want to stay hooked on MS software rather.

Re:Three strikes

[NutscrapeSucks]

The problem is Microsoft just calculates how much they expect to pay in fines etc. each year, and simply work it into their operating costs and into their pricing.

This is ridiclous. We're talking about things that happened more than 10 years ago -- Microsoft surely believed that they either (A) weren't doing anything wrong, or (B) would get away with it scott-free. I highly doubt there was any anti-trust cost-benefit analysis done. (Although IBM may have done one with their weak packaging of OS/2.)

Re:Three strikes

[Anonymous Coward]

What, you think that was the first time MS went to court for anti-competitive practices? You think it was the last? You think there won't be more? WTF.

You mean all those windows machines ..

[Anonymous Coward]

would suddenly automagically stop working if microsoft goes under?
You think that no company would fill in the gaps, offering replacement products?
I find that very, very hard to believe ..

What They'll Use That Money For

[Greyfox]

I suspect that the money will be used in a video of the IBM officers rolling around in a big pile of cash. Said video will be mailed to Darl McBride as a reminder that some companies can actually win legal cases.

Who's Wak

[tezbobobo]

Last time I was in a Law unit (two years ago when I was finishing my law degree) it was commonly accepted wisdom that the purpose of these payouts was recuperation and/or repairation. The contemporary tendency to apply penal damages is killing the legal system and an abuse of the law. I notice you got a 5 insightful, you should have got 5 Ambulance Chaser.

Where to signup?

[sjs132]

For my $20 Ebay voucher because MS killed my OS/2?

Seriously... I've got at least 3 copies of OS/2 Warp in a box someplace... I want a class action suite now! :(

My OS/2 is still dead... I feel empty and cold inside. )`: Bill... What are you doing Bill... Will we dream???????

Much of it *has* been ported.

[Richard Steiner]

The EMX libraries (a DLL that maps the POSIX API to native OS/2 API calls) have existed for years, allowing many text-mode Linux programs like slrn, pine, lynx, links, Midnight Commander, etc get ported to OS/2.

In addition, XFree86 has been ported to OS/2 for years, and OS/2 users have had access to a native port of GIMP 1.x for some time.

Apache is ported to OS/2 already, and OpenOffice has been ported by Innotek. Note that the original StarOffice (on which OpenOffice is based) was written for OS/2, so OS/2 users have a long history with that code base.

One thing that would help OS/2 immensely, IMO, is support from the QT and GNOME folks.