Microsoft Sets Aside $500 Million to Address Antitrust Claims

Strategic Insights -

Microsoft has set aside more than $500 million to combat or settle future claims of abuse of its dominant market position. This move comes a year after the European Commission fined the company a record €497 million for anti-competitive behavior. The company has also reached settlements with Gateway and Burst.com, agreeing to pay $150 million and $41 million, respectively. Additionally, Microsoft is breaking with tradition by launching the next generation of its Xbox games console on television, marking a shift from traditional industry trade shows.

Key Takeaways:

  • Microsoft has allocated $500 million to address potential antitrust claims, in addition to a $550 million pre-tax charge for ongoing inquiries and two settlements announced yesterday.
  • The company has reached a deal with Gateway, agreeing to pay $150 million over four years to settle a competition dispute.
  • Microsoft also agreed to a $41 million settlement with Burst.com.
  • The company is moving away from traditional industry trade shows, with plans to launch the next generation of the Xbox games console on television.
  • The launch of the Xbox console will be broadcast on MTV, a music broadcaster, on May 12.
  • Microsoft faces lawsuits in the US, alleging unfair competition in the market for operating systems and certain software applications.
  • The company is also under investigation in Korea by "various foreign governments".
  • The provision is in addition to a €497 million fine imposed by the European Commission a year ago for anti-competitive behavior.

Statistics:

  • $500 million: The amount set aside by Microsoft to address potential antitrust claims.
  • $550 million: The pre-tax charge taken by the company to cover possible claims from ongoing inquiries and two settlements announced yesterday.
  • $150 million: The amount Microsoft will pay Gateway over four years to settle a competition dispute.
  • $41 million: The amount Microsoft agreed to settle with Burst.com.
  • $497 million: The record fine imposed by the European Commission for anti-competitive behavior.
  • May 12: The date of the broadcast launch of the next generation of the Xbox games console on MTV.

Sources:

  • The Times, 2005