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Be and Microsoft Settle

In February 2002, my former employer, Be Incorporated, filed suit against Microsoft:

Be Incorporated ("Be"), brings this action to recover damages under the antitrust laws of the United States and the laws of California for the destruction of its business as a direct result of the illegal and anticompetitive practices of Microsoft Corporation ("Microsoft")..

As a result of Microsoft’s anticompetitive practices in the market for Intel-compatible PC operating systems, including its willful maintenance of its own monopoly power in that market, and in the related markets for Internet appliance operating systems and browsers, Microsoft has had a direct, substantial, and adverse effect on competition by artificially raising barriers to entry, foreclosing competition on the basis of price and performance, and stifling innovation. Buyers of PCs and software have thus been forced to pay higher prices for less innovative, inferior products. In addition, Microsoft’s unlawful conduct has forced Be to cease doing business.

Now comes word that Be and Microsoft just settled their dispute today:

Be Incorporated (Nasdaq:BEOS)(OTC:BEOSZ.PK) and Microsoft Corporation (Nasdaq:MSFT) today announced that the parties have reached a mutually acceptable mediated settlement of an antitrust lawsuit filed by Be Incorporated in February 2002, which is currently pending in the United States District Court for the District of Maryland in Baltimore. Be will receive a payment from Microsoft, after attorney's fees, in the amount of $23,250,000 to end further litigation and Microsoft admits no wrongdoing. All other terms of the settlement will remain confidential. Both parties are satisfied with the Agreement and believe that it is fair and reasonable. This is the second private antitrust lawsuit Microsoft has settled this year.

Be is currently in the process of completing its dissolution pursuant to the plan of dissolution approved by Be's stockholders in November 2001. In accordance with that plan and upon completion of its dissolution, Be's net cash will be distributed to shareholders of record as of March 15, 2002 after payment of any taxes, officers' and directors' compensation, and other expenses, and the satisfaction of any and all of Be's remaining liabilities.

I have personal reasons to be glad this is settled -- not that I stand to receive any money, but as a former executive of Be, I was scheduled to be deposed in the case soon. In a situation like that, the best that can happen is that one manages to avoid looking like an idiot -- not exactly something to be excited about.

Having said that, it would have been interesting to see the case go to trial. I don't have first-hand information about Be's allegations of interference in its fundraising efforts, and I don't think Be's argument that Microsoft deliberately destroyed the market for Internet appliances would have flown with a judge or jury. But Be made some very specific allegations about anti-competitive behavior in operating system licensing, and I would have been fascinated to see the parties debate that issue in court.

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» Be Settles Suit with Microsoft from birdhouse.org
Raise your hand if you sold all your BEOS stock when things became hopeless. If you kept it until March 15, 2002, you may be paddling a new canoe this Fall. Microsoft just agreed to pay Be $23,250,000 and "admit no wrongdoing" to put the lingering laws... [Read More]

Comments

Frank, when you say "the best that can happen is that one manages to avoid looking like an idiot" are you referring to the difficulty of navigating an expensive lawyer's line of questioning, or something else?

Readers interested in learning more about MS' anti-competitive licensing behavior vis-a-vis Be should read my "He Who Controls the Bootloader":
http://www.birdhouse.org/beos/byte/30-bootloader/

Scot, yes, my reference was to being deposed. No matter how well one is prepared, the fact is that you're going being questioned by highly experienced lawyers who are immersed in the case (undoubtedly remembering your own e-mails better than you) and who wouldn't mind making you look like a fool.

So, in this case, had I been deposed, either 1) I would have handled myself well and therefore a) increased my chances of being called to testify and b) made a bunch of enemies at Microsoft, or 2) I would have handled myself poorly with all the repurcussions of that. Not exactly a win-win situation...

Frank, it may be interesting if the Investors reject the offer. It comes down I think to what they say.

Final word, but I don't think 23 million is seriously trying to stay out of court, if you know what I mean hehe..

It's disearnest compensation.

The shareholders don't get to reject the offer. They voted to dissolved the company.

The shareholders didn't get to vote for the focus shift, didn't get to vote on deciding whether or not to find a buyer, didn't get to vote on deciding whether or not to sue Microsoft --- and they don't get to vote on whether to accept the Microsoft settlement or not.

i for one am glad that it is over and will be happy to see the moneies distributed amongst shareholders. i bought 400 shares almost immediately after the IPO and have never let them go. i figure that $23,250,000 may well widdle down to a round $20,000,000 (i have no idea, really, what debts are yet outstanding). with 6 million shares that comes to $3.33/share and enough money to recharge my failing financial situation (modestly anyhow). now, with that said, i taste bile squirming up my tonsels as i clench my fist realizing that microsoft has (probably) succeeding in buying their way out of one of the more-likely-to-succeed anti-trust trials. i fret the rememberence of my nieve days - when i myself felt loyalty to the beast of redmond that has so grossly insulted my profesion - my passion - by producing compiled garbage. when i first learned of BeOS i was so excited to see that an organization could be so driven to produce 'The Best They Can' - and microsoft has cetainly played their signifcant role in destroying a thing of beauty. the worst of it is, with all of microsoft's resources, they could be making me proud today instead of destroying those startup's eagerly trying to.

There are 38.4 million shares outstanding (not 6 million).

i like to get the last word in:

Be Inc. Memorial Couch Swatch Auction:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=3241684850

:)

- mikepop

M!k3: 5w337!

Does anyone know when the shareholders will receive the payout, and how that will work? Ie, do we have to contact Be or will it "appear" in our portfolio's?
BTW: As a programmer, I am extremely disappointed at the settlement, and I imagine it is only in large part to the fact that the law team working on this case was working on a contigency basis; that kinda ties the plaintiff's hands a little. The 23 million to be paid to BE is a drop in the bucket; especially when you consider the damage this case could have done to Microsoft.

-sigh- Yes, I also owned an Amiga.

Jeremiah, according to Be's Website, they have yet to announce plans for distribution of the proceeds, or even how much of the proceeds will be available for distribution. I suppose you might want to set a demon to check the Website for updates on a daily basis...

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