The recent deal between Microsoft and the Computer and Communications Industry Association (CCIA) whereby the CCIA withdrew from the EU competition case against Microsoft included a payment of $9.75m (£5m) to the CCIA's president, according to the Financial Times yesterday.
Almost half the total $19.75m settlement went to Ed Black, president and chief executive of the US industry body since 1995, in a deal approved by the CCIA board, according to a report in the FT which cited confidential documents.
A Microsoft spokesman declined to comment and the CCIA referred questions to Black, who could not be reached.
Two weeks ago Microsoft announced it had reached agreements with the CCIA and Novell, both of which had been major Microsoft opponents in a six-year competition case before the European Commission.
As part of the settlement, reached earlier this month, the CCIA withdrew from any legal proceedings against Microsoft regarding the commission's competition ruling and the subsequent appeal currently before the European Court of First Instance. The CCIA also withdrew the complaint it filed to the Brussels regulator in 2003, leaving RealNetworks the last remaining company with a broad-based complaint in the commission's case.
But the CCIA deal with Microsoft did not sit well with all the companies on the CCIA board, which includes Sun, Yahoo and Oracle. Nokia resigned from the board.
"The settlement content and process were inappropriate," said Nokia spokeswoman Arja Suominen. "That's why we left the association." She declined to make any further comment.
According to the FT report, a confidential annexe to the agreement with the CCIA provided for a “one-time bonus” to Black plus an annual salary of $500,000 for the next three years. The deal distinguishes between Microsoft's overall payment to the CCIA and the payments Black received.
At the time the deal was announced the CCIA said it was not retracting or changing positions taken in the past. But Brad Smith, senior vice-president and lawyer for Microsoft, said the deals with the CCIA and Novell clearly demonstrated that the EU did not need to be involved with competition matters that could be settled directly between the companies in question.
The European court judge has called a meeting for today to discuss procedural matters surrounding the withdrawal of the CCIA and Novell from the case. The judge is currently considering a Microsoft request for suspension of the commission's sanctions against Microsoft until the court has decided to uphold or overturn the decision.
Laura Rohde writes for IDG News Service. John Blau and Simon Taylor also contributed to this story.