Microsoft Settles Be Antitrust Suit

May 9th, 2007

Microsoft will pay Be more than $23 million after attorneys’ fees to settle an antitrust lawsuit that the maker of the Be operating system filed against in February 2002, the companies have announced.

Microsoft admitted no wrongdoing in the mediated settlement in which all other terms remained confidential, the companies say in a statement. The case is currently pending in the U.S. District Court for the District of Maryland, in Baltimore.

The suit by Be, which developed a PC operating system, charged Microsoft with “exclusionary and anticompetitive acts designed to maintain its monopoly in the Intel-compatible PC operating system market,” according to Be’s statement when the suit was filed.

Be emerged as a developer of operating system software in 1997. The company sold its operating system and most of its assets to Palm in 2001.

Be’s case is one of several vendor suits filed in the wake of the federal antitrust case against Microsoft. A federal judge declared in 2000 first that Microsoft enjoys a monopoly in the operating system business, and then that it had abused that status. The ruling was later upheld by a U.S. Court of Appeals.

Be originally marketed its software as a Windows alternative that was better suited than Microsoft Windows for digital video and other multimedia applications. The company tried to cut deals with vendors of Intel-based PCs to load the BeOS along with Windows through a dual-boot configuration.

Be claims it was unsuccessful at closing such contracts because Microsoft had signed anticompetitive contracts with its industry partners.

One provision in the settlement of the federal antitrust case against Microsoft was that the software company had to loosen its licensing provisions with PC vendors. Microsoft is also prohibited from retaliating against vendors that work with competing software vendors.

In May, Microsoft settled a similar claim with Netscape, now owned by America Online Time Warner. Netscape also cited the federal antitrust case, and argued that Microsoft had bundled its competing Internet Explorer browser with Windows a way that harmed Netscape’s Navigator Web browser business.

Since the federal case was settled, Microsoft has also been working to settle dozens of similar complaints, including class-action suits.

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