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The two companies announced a settlement of antitrust claims going back to the government's suit against Microsoft.

During the United States vs Microsoft case, Judge Thomas Penfield Jackson's findings identified IBM as being harmed by Microsoft's business practices. Microsoft and IBM agreed to settle the claims of antitrust, overcharging, and discriminatory pricing practices.

Microsoft will pay IBM $775 million USD in settlement of the claims. Further, Microsoft will extend $75 million in credit intended to extend deployment of its software at IBM.

IBM's claims included the contention that Microsoft damaged its OS/2 operating system and its SmartSuite office application products with its practices. While the announced settlement puts those claims to rest, it excludes claims for harm to IBM's server hardware and software lines.

IBM has agreed, with certain limitations, to not pursue claims against Microsoft for server monetary damages for a period of two years. It also agreed not to seek damages for claims generated by damages incurred before June 30, 2002.

"There's a settlement and there's not much more to say," IBM spokesman Scott Brooks said. "It resolves some of the long- standing issues and we are pleased we were able to reach this settlement. We have been working on this resolution for the past two months."

Microsoft was up seven cents to $24.91 at 10:20 am on July 1, while IBM was up a dollar to $75.20.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.