Microsoft settles with RealNetworks for $761m

RealNetworks has settled its 2003 $1bn (£600m) anti-trust lawsuit against Microsoft, with Microsoft agreeing to a $761m settlement.

RealNetworks has settled its 2003 $1bn (£600m) anti-trust lawsuit against Microsoft, with Microsoft agreeing to a $761m settlement.

The settlement includes $460m to address all damages and claims worldwide in RealNetworks’ lawsuit, and Microsoft providing additional marketing and research and development investment in RealNetworks’ media player products, to help integrate them with Windows, the MSN portal and Microsoft’s Xbox games products.

As part of the deal, RealNetworks has also withdrawn from the European Commission anti-trust case it helped initiate against Microsoft. The European Commission ruled against Microsoft over the way it bundled Windows Media Player with Windows, helping to stifle the take-up of RealNetworks media players.

The ruling, along with others covering different issues against Microsoft, led to Microsoft being fined and forced to unbundle Windows Media Player from the Windows operating system in Europe.

Microsoft is appealing all the anti-trust rulings and RealNetworks’ decision to end its involvement could help Microsoft overturn the original rulings when it reaches court.

Microsoft will also pay RealNetworks $301m million to support RealNetworks' product development, distribution and marketing under music and game agreements.

The new partners will now jointly promote and market RealNetworks' Rhapsody music subscription service, including on the Microsoft MSN portal. Microsoft will also offer RealNetworks' digital games through MSN Games and the Xbox Live Arcade for XBox 360.

Of the few crumbs going Microsoft’s way in the deal, RealNetworks will support the MSN Search facility through its services, helping to generate more traffic for Microsoft’s search engine, and to support Microsoft’s digital rights management technology already used in Windows Media Player.

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