Payments made by Microsoft to escape its antitrust morass are set to top $6.5 billion (€5 billion), following news yesterday that the world's largest software group would pay $150 million to PC maker Gateway and set aside another $550 million against further legal claims.

Along with a $43 million charge to reflect a settlement with Be, a software maker, last month, this will result in a pre-tax charge in the latest quarter of more than $700 million, Microsoft indicated.

The Gateway settlement takes to six the number of companies in the computer industry with which Microsoft has reached private agreements, at a combined cost of more than $3.5 billion.

It has also paid out more than $1.8 billion to settle state-level antitrust suits in the US and paid a fine of about $600 million to the European Commission.

The new provision against future costs suggests that other big payments still lie ahead before the company can finally put the legal problems dating from the mid-1990s behind it.

Among the biggest are a private case bought by RealNetworks, whose software is at the centre of the EU's action against Microsoft, and a class action in New York, one of only a handful of states still pursuing a claim.

Like Novell, a technology group that received $536 million in a settlement last year, Gateway has never filed a lawsuit against Microsoft.

However, the judge overseeing the US government's case against Microsoft at the late 1990s said the computer maker had suffered "significantly more" than others when it was penalised for resisting Microsoft's demands. Gateway has agreed to forgo any legal claim in return for $150 million in payments over the next four years, the two sides said.

The payments will be linked to research and development, advertising and other costs that Gateway faces in launching products that depend on Microsoft software.

The decision to set aside a provision of $550 million appeared to suggest that Microsoft was nearer to reaching other antitrust settlements. - (Financial Times Service)