Microsoft and AOL end browser wars with $750m peace deal
- Added:
- May 30, 2003
The legal settlement resolves the private antitrust lawsuit filed against Microsoft in January 2002 by AOL Time Warner's America Online unit on behalf of its subsidiary, Netscape Communications. The suit had accused Microsoft of illegally dominating the market for internet browsers, shutting out Netscape, and called for monetary damages as well as competition to be restored in the market.
As part of the wider agreement, AOL has won a royalty-free licence to use Microosft's IE browser technology for seven years, and also allows AOL to use Microsoft Windows Media 9 Series multimedia software, including its DRM tool for securing music and video files from piracy.
The companies said their aim is help develop a successful digital media environment that is secure from piracy, open to all companies across multiple industries. They will also work together to finally make their instant messaging systems compatible, after several years of digging in their heels over IM compatibility.
In addition, Microsoft will distribute AOL's online service software discs with Windows that are shipped to the "white-box" personal computer manufacturers that make customised PCs from off-the-shelf components.
The settlement is a win-win situation for both firms, marking the end of one of Microsoft's many ongoing antitrust disputes, and giving AOL Time Warner cash to pay off some of its $26bn debt.
However, the deal does not bode so well for Netscape, and analysts expect the browser will gradually be phased out, though AOL time Warner did not give any details about its future plans for the subsidiary apart from saying that it would continue to provide support for the browser.
It could also spell bad news for RealNetworks, Microsoft's rival in the digital media software market, although AOL Time Warner said the agreement with Microsoft is not exclusive and that it would continue to work with other software firms.
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