$761 million settlement is Real deal

Microsoft and RealNetworks have announced three agreements worth $761 million to RealNetworks to settle their antitrust case and create a new partnership to promote consumer choices in digital entertainment.


Microsoft and RealNetworks have announced three agreements worth $761 million to RealNetworks to settle their antitrust case and create a new partnership to innovate and promote consumer choices in digital music and games.


The three agreements include an agreement to resolve all the companies’ antitrust disputes worldwide; an agreement for a wide-ranging digital music collaboration between the companies, including promotional and marketing support of Real’s digital music subscription service, Rhapsody; 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 $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 $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 $460 million up-front cash payment to resolve all damages claims and a series of technology licenses and commitments under which Real will obtain long-term access to Windows Media technologies.



“Today we’re closing one chapter and opening a new one in our relationship with Microsoft,” said Rob Glaser, Founder and CEO of RealNetworks. “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.”



The agreement includes a global settlement of all antitrust disputes, including the lawsuit brought by Real against Microsoft nearly two years ago in the United States and Real’s participation in the proceedings initiated by the European Union and Korea.


The agreement includes a variety of assurances regarding the design of the Windows operating system, including Windows Media Player, and access for Real to a broad range of Windows platform technologies.