CCIA and Microsoft Agree to Work Together on Common Issues;Agreement Resolves Past Conflicts and Lays GroundworkFor Future Cooperation

WASHINGTON, D.C., and REDMOND, Wash., Nov. 8, 2004 — The Computer & Communications Industry Association (CCIA) and Microsoft Corp. today announced they have entered an agreement to resolve several outstanding issues on which they have been on opposite sides, in some cases for several years, and to work together on important and pressing technology issues facing the high-tech industry.

The agreement reflects recognition by both CCIA and Microsoft that there are important public policy issues where there is an important commonality of interest throughout the information technology industry, but where cooperation has been hindered by the contentious relationship between them.

As part of this agreement, Microsoft will join the membership of CCIA. The company will compensate CCIA for certain legal-related expenditures it has incurred, in some cases over the past decade, and provide substantial institutional support for new and important policy undertakings on which CCIA will take a leadership role.

CCIA in turn agreed not to seek certiorari to the Supreme Court in its challenge to the District Court’s Final Judgment in the United States v. Microsoft antitrust case. The Washington, D.C.-based trade association has also agreed that it will no longer participate as an intervener on behalf of the European Commission in Microsoft’s appeal of the Commission’s March 24 Decision, and it will also withdraw its complaint with the European Commission filed in February 2003 on issues related to Microsoft® Windows® XP. Specific financial terms of the agreement are confidential.

In entering this agreement, CCIA underscored its desire to increase its ability to address a growing number of important issues facing the industry. The agreement will enable CCIA to focus its resources and energy with greater cooperation and support from Microsoft and its business partners. “We are pleased with this agreement and expect that our relationship with Microsoft and others will enable us to address important issues impacting millions of people and the future of our industry,” said Ed Black, president and CEO of CCIA. “While there may be times when we and Microsoft will not agree on every issue, we are looking forward to developing a stronger relationship. We believe that CCIA has an important opportunity to help unite the industry more effectively on key issues such as broadened Internet access, strong support for R & D, and ensuring that we act as an effective engine for economic growth around the world.”

For its part, Microsoft noted the importance of moving beyond conflicts and forging more constructive relationships in the industry. “The industry is at its best when we move forward together to address the issues of greatest concern to consumers, from security to online safety to helping ensure strong education and a highly skilled work force,” said Brad Smith, senior vice president and general counsel at Microsoft. “Today’s agreement is another step forward in our effort to move beyond disagreements that have divided us in the past and helps us support an effective alliance to address issues that will benefit the industry and consumers in the future.”

For over 30 years, CCIA has been committed to open markets, open systems, and full, fair and open competition. CCIA’s commitment to these principles is undiminished, and it welcomes Microsoft to the table as a global corporate citizen and new CCIA member.

Some of the issues on which CCIA expects to work most cooperatively with Microsoft in the future are broadband deployment, support for scientific research, spam, spyware, immigration policy, export controls, privacy, limiting government e-commerce activity, and in-shoring and off-shoring, among others.

The agreement has been approved by the CCIA board of directors. CCIA is a nonprofit membership organization representing the interests of the computer, communications, software, Internet, and e-commerce industries. CCIA was an outspoken advocate of government action during the Department of Justice antitrust proceeding against Microsoft as well as a participant in the European Commission case against Microsoft. “Life is a constant reordering of priorities, and for important and pragmatic reasons we are choosing to move on with regard to this matter,” Black said. “Neither I, nor CCIA, can recant the many things we have said and filed relating to Microsoft. Although we know and value the important role we have played on this matter over the years, there are other current and emerging matters which demand our attention. There are many serious challenges and exciting opportunities facing our industry where we think we can make a difference.”

While some differences on issues may continue, the parties acknowledged that there will be potential benefits in working together and bringing to bear the skill and resources of CCIA on issues of common interest. “Even though we have had strong disagreements with their positions in the past relating to our business, we developed a strong appreciation for the skill and creative efforts put forward by CCIA and Ed Black,” Smith said.

By agreeing not to seek certiorari to the Supreme Court, the agreement also effectively ends the seven-year-long antitrust case in the United States. Massachusetts, the only state that appealed the District Court’s final judgment, has indicated that it will not be seeking a Supreme Court review of its appeal.

“Today’s agreement, along with the decision by the Commonwealth of Massachusetts, marks the end of a long legal process in the United States. As we continue to focus our energy on living up to the obligations of the Court’s final judgment in this case, we look forward to greater collaboration with Attorney General Reilly and other Massachusetts officials as well as CCIA on a wide range of issues that are important to consumers and to the technology industry,” Smith said.

About CCIA

The Computer & Communications Industry Association (CCIA) is a nonprofit membership organization for companies and senior executives from diverse sectors of the computer and communications industry. CCIA’s mission is to further our members’ business interests by being the leading industry advocate in promoting open, barrier-free competition in the offering of computer and communications products and services worldwide.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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