Microsoft, RealNetworks settle suit

SEATTLE — Digital media company RealNetworks Inc. announced a legal settlement Tuesday with longtime adversary Microsoft Corp., ending the last major antitrust case against the world’s largest software maker.

RealNetworks said it had reached three deals with Microsoft worth up to $761 million. That includes a $460 million upfront cash payment to settle the antitrust dispute. Another part of the agreement gives RealNetworks an additional $301 million in cash and services designed to help the company’s products reach a wider audience.

In exchange, RealNetworks agreed to drop all its antitrust claims against Microsoft worldwide.

“Today we’re closing one chapter and opening a new one in our relationship with Microsoft,” Rob Glaser, RealNetworks’ founder and CEO, said in a statement released before a joint news conference.

Seattle-based RealNetworks sued in December 2003, accusing Redmond-based Microsoft of illegally forcing Windows users to accept Microsoft’s digital media player. RealNetworks said its player suffered as a result.

RealNetworks has for years been one of Microsoft’s direct competitors in the growing field of digital music and video. But the smaller company has struggled in the face of its massive rival, which Glaser left to form RealNetworks. Both companies have also found it tough to compete against digital music’s juggernaut: the iPod digital music player from Apple Computer, Inc. and the company’s iTunes online music store and jukebox software.

Tuesday’s settlement is the latest in a series of peace accords that have cost Microsoft several billion dollars in recent years but have also served to put many of the cash-rich company’s legal woes behind it.

In July, Microsoft reached an $850 million deal with International Business Machines Corp. That followed a $1.6 billion settlement with Sun Microsystems Inc. in 2004 and a $750 million truce with America Online, part of Time Warner Inc., in 2003.