Microsoft Alters Deal to End EU Dispute

Microsoft Corp. altered an agreement with rival software maker Santa Cruz Operation Inc., ending a dispute with European Commission regulators who said the contract hindered SCO’s ability to compete. The disputed agreement required SCO to include Microsoft’s computer code in its Unix operating system and to pay royalties whether or not it used the code. Santa Cruz-based SCO filed a private complaint with the European Union in January, and the commission, the executive arm of the EU, found in May that the contract violated EU competition law. The agreement was originally made between Microsoft and AT&T; Corp. in 1987 as part of an effort to create a single merged Unix product, Microsoft said. The contract’s terms were transferred to SCO in 1995. Under the altered contract, SCO must pay royalties to Microsoft only when it uses the Microsoft Unix code. A spokesman for SCO was not immediately available to comment on the financial implications of the settlement. In Nasdaq trading, shares of Redmond, Wash.-based Microsoft fell $2.38 to close at 135.50, while SCO fell 13 cents to $5.88.