Microsoft Pays AOL $750 Million in Suit Settlement

Jun 03, 2003


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AOL Time Warner and Microsoft have settled an antitrust lawsuit filed by AOL last year on behalf of its Netscape division. The suit held that the practices used by Microsoft have harmed its Netscape Internet browser business. Under terms of the settlement, Microsoft agreed to pay AOL $750 million, in a lump sum payment. AOL spokesmen have said that the settlement money will be used to help pay off some of its $26 billion in debt. The agreement will place Microsoft digital media technology on AOL's online service and allows for the possibility of technology sharing between the two companies in the future. One area of anticipated collaboration is instant messaging, where an agreement could facilitate interoperability between Microsoft's MSN Messenger and AOL Instant Messenger (AIM). Other potential issues include digital copyright protection of online media, which has become a serious issue for both companies. Following the agreement, AOL is expected to refocus on media content while Microsoft is likely to return to a focus on technology. Under their agreement, AOL will have access to Microsoft's digital media and digital-rights management technologies, including its Windows Media 9 Series platform, but the nonexclusive license doesn't require AOL to provide Windows Media to its users. AOL also received a royalty-free, seven-year license to use Microsoft's Internet Explorer technologies with the AOL client. AOL's case was handled by U.S. District Judge J. Frederick Motz in Baltimore, the same judge who ruled against Microsoft last December in a lawsuit brought by Sun Microsystems over Microsoft's inclusion of the Java programming language with Windows.

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