The third largest PC maker in the US has apparently asked the SEC for advice on a settlement, in which Microsoft agreed to pay Gateway $150m over four years, in return for release of all of Gateway’s antitrust claims. The companies also agreed to work on developing PC products for Gateway.
The Irvine, California-based computer maker said the request would outline proper accounting for elements of the April agreement with Microsoft. The resolution of the Microsoft treatment will only result in additional benefits or income to Gateway, the company said in a statement.
Because of the complex accounting interpretation issues related to our agreement with Microsoft, we voluntarily made a pre-filing submission seeking the SEC’s guidance to ensure we apply proper accounting treatment, said Rod Sherwood, Gateway senior VP and CFO in a statement.
We believe it would be inappropriate to issue results in advance of receiving that guidance.
Shares in the outfit fell 0.25% to $4.06 on the New York Stock Exchange, as of 5.15pm BST on Friday
Microsoft has been making a concerted effort to settle outstanding litigation for the last couple of years. Its settlement with Gateway relates to the US government’s prosecution of Microsoft for illegally leveraging its operating system monopoly to squeeze Netscape out of the browser market in the mid-1990s.
Gateway, along with IBM Corp, was specifically named as an injured party in Judge Thomas Penfield Jackson’s November 1999 findings of fact. The two PC makers ended up paying more for software because they were reluctant to toe Microsoft’s line.
IBM meanwhile is expected to get a check for at least $775m from Microsoft in exchange for dropping most of its antitrust claims against the company.
