Court ruling could reopen Microsoft settlement talks

Posted: Thursday, December 23, 2004

SEATTLE - Dogged by distracting and reputation-tarnishing legal difficulties, Microsoft Corp. has spent the last few years working feverishly to settle its many court challenges.

It has found surprising success with companies that were once its fiercest rivals, but has hit a brick wall with European Union regulators who accuse the company of antitrust violations.

Microsoft on Wednesday lost a key court ruling in its ongoing EU antitrust battle. The ruling forces Microsoft to comply with sanctions ordered in a landmark decision in March even as it pursues an appeal.

EU officials have said a ruling in their favor would narrow the chance of reopening settlement discussions.

Microsoft's top lawyer, Brad Smith, said the company would continue to pursue a settlement.

Microsoft already has been able to settle with four of the five major interveners in the EU's case. The company spent billions to settle claims by competitors Time Warner Inc. and Sun Microsystems Inc. Then Novell Inc. and the Computer and Communications Industry Association dropped out of the case after striking deals with the company.

The last big company left in the EU case is Seattle's RealNetworks Inc., which sued Microsoft in U.S. federal court last December seeking more than $1 billion.

Microsoft has been eager to settle its many legal woes because the battles were harming its business and its image, analysts say. Besides cash, it has dangled other goodies in front of opponents, such as cross-licensing agreements or pledges to avoid additional legal skirmishes.

But even Microsoft's Smith concedes that trying to settle with government entitites is more complicated.

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