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Microsoft, Gateway reach antitrust settlement

Software giant will pay $150 million over four years to settle antitrust claims brought by the PC maker.

Microsoft has agreed to pay Gateway $150 million over four years, as part of an agreement to settle antitrust claims brought by the computer maker, the two companies said Monday.

The agreement stems from the Justice Department's antitrust trial against Microsoft in the 1990s. During that trial, U.S. District Judge Thomas Penfield Jackson found that Gateway and IBM tended to pay higher prices for Microsoft's software because they were less willing to bundle its Internet Explorer browser with their PCs and because they favored rival Netscape Navigator.

Following Jackson's findings of fact, Microsoft and Gateway agreed to extend the 2003 statute of limitations deadline for Gateway to file a lawsuit against Microsoft, in order for the parties to reach a settlement.

"We're pleased to put these legacy legal issues behind us," Wayne Inouye, Gateway's chief executive, said in a statement. "We look forward to even greater collaboration with Microsoft going forward as we work together towards the future of computing."

Under the deal, Gateway will use the funds for marketing, research and development, and testing of new products that can run Microsoft's current and next-generation operating system and productivity software.

Gateway, as a result of the settlement, will release all antitrust claims against Microsoft based on past conduct. Microsoft denied any liability but indicated that it was pleased to put the legal issues behind it.

"Our relationship with PC manufacturers are integral to our success, and we look forward to working even more closely with Gateway to communicate the benefits of its products and our software to consumers," Rodrigo Costa, Microsoft's original equipment manufacturing vice president, said in a statement.

Microsoft has settled a number of antitrust claims in recent years.

Last year, Microsoft and Sun Microsystems reached a $1.95 billion settlement to resolve antitrust and patent issues between the companies. Also last year, Microsoft and Novell reached a $536 million settlement, in which Novell agreed to withdraw from the European Commission's antitrust case against Microsoft.