Sun, Microsoft settle antitrust lawsuit

SAN JOSE, Calif. (AP) -- Struggling server maker Sun Microsystems Inc. reached a sweeping, $1.6 billion settlement with Microsoft Corp. and said it plans to cooperate with its longtime nemesis, a company it had branded an unrepentant monopolist.
The surprise agreement was accompanied by an announcement by Sun that it is cutting 3,300 jobs and that its net loss for the fiscal third quarter will be wider than expected. The cuts represent 9 percent of its total work force of more than 35,000.
The "broad cooperating agreement" with Microsoft ends Sun's $1 billion private antitrust suit against the Redmond, Wash.-based software giant.
"This agreement launches a new relationship between Sun and Microsoft -- a significant step forward that allows for cooperation while preserving customer choice," said Scott McNealy, Sun's chief executive.
As part of the deal, Microsoft will pay Sun $700 million to resolve the antitrust case, which was scheduled to go to trial in January 2006, and $900 million to resolve patent issues.