Microsoft settles with RealNetworks

Microsoft has given RealNetworks US$761 million to settle the antitrust case that has dogged the software giant. Furthermore, the two firms have pledged to work closely in the digital music and games field.

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By  Simon Duddy Published  October 12, 2005

Microsoft has given RealNetworks US$761 million to settle the antitrust case that has dogged the software giant. Furthermore, the two firms have pledged to work closely in the digital music and games field. Microsoft chairman and chief software architect Bill Gates and RealNetworks' chairman and CEO Rob Glaser shook on the three part agreement, which includes a resolution for all the companies’ antitrust disputes worldwide. It also includes an agreement for a wide-ranging digital music collaboration between the parties, including promotional and marketing support of Real’s leading digital music subscription service, Rhapsody, on MSN properties; and an agreement to offer RealNetworks’ digital games through MSN Games and Xbox Live Arcade for Xbox 360. Under the music and games agreements, Microsoft is scheduled to pay Real US$301 million in cash and provide services over 18 months in support of Real’s product development, distribution, and promotional activities. Microsoft will earn credits at predetermined market rates to be applied to the US$301 million for subscribers delivered to Real through MSN. Additionally, Real will take steps to support MSN Search, and Real and Microsoft will jointly promote use of Windows Media technologies with Rhapsody to Go. The antitrust and technology assurance agreement resolves all antitrust disputes worldwide, based on a US$460 million up-front cash payment to resolve all damages claims. “Today we’re closing one chapter and opening a new one in our relationship with Microsoft,” says Glaser. “The legal chapter is being closed with an appropriate and fair outcome that sets the stage for a very productive and collaborative relationship between our companies. By integrating Real’s premier music and games services into Microsoft’s very popular MSN service, we will reach more consumers today and deliver even better products and services tomorrow.” “This agreement will provide MSN’s millions of customers with easier access to subscription services for the music and games they love,” says Gates. “Digital music is one of the fastest growing segments of the online entertainment industry, and by promoting Rhapsody’s subscription music services from within MSN, we will provide a better experience for our users.”

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