Microsoft settles with Gateway in antitrust case
Microsoft settles with Gateway in antitrust case
Apr 12, 2005: Microsoft is to pay Gateway US$150 million over four years as part of a settlement of antitrust claims brought by the PC maker against it.
The dispute between the companies dates back almost ten years. Back then, the US Justice Department found that Gateway - together with fellow PC maker IBM – tended to pay more for Microsoft's software than other PC vendors because of their unwillingness to bundle Microsoft's Internet Explorer web browser with their machines. The fact that both Gateway and IBM preferred the rival Netscape Navigator browser was also found to have impacted negatively on the prices they secured from Microsoft.
Since this was established, both companies requested an extension of the statute of limitations deadline, which was due to expire in 2003, so that both parties could reach an appropriate settlement.
Now that this has been achieved, the funds will be used by Gateway to market and develop its products, and Microsoft has also agreed to work together with them on this. The marketing initiatives will include advertising, sales training and consulting, as well as the research, development and testing of new Gateway products that can run current Microsoft products and Microsoft's next-generation operating system and productivity software.
Gateway president and CEO, Wayne Inouye's tone was conciliatory in the wake of the settlement.
"Gateway continues to enjoy a strong relationship with Microsoft and we're pleased to put these legacy legal issues behind us. We look forward to even greater collaboration with Microsoft going forward as we work together towards the future of computing."
Rodrigo Costa, OEM corporate vice president at Microsoft, struck a similarly positive tone when discussing how the pair will work together in the future.
"Our relationships 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. We are very pleased to be able to resolve our past differences in a constructive manner that will allow us to continue our focus on the interests of our mutual customers."
As part of this agreement, Gateway will release all antitrust claims against Microsoft based on past conduct. Despite agreeing to a financial settlement, Microsoft denies any liability to Gateway.
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