Microsoft Corp and the US Justice Department settled their three-year antitrust battle Friday, and several leaders of the 18 states suing the world's largest software maker said they may join the accord.
The settlement's centerpiece lets computer makers highlight rival software on the Windows operating system, instead of Microsoft applications, without fear of retaliation. Microsoft also must disclose the code needed for competing media players, instant messaging software and other programs to run on Windows.
Three leading state attorneys-general praised the agreement and suggested they might sign on by a judge's Tuesday deadline, even after their California counterpart said it would be irresponsible to move that quickly. Critics, including AOL Time Warner Inc, and Sun Microsystems Inc, said the deal leaves Microsoft free to abuse its software dominance and urged the states to press for tougher remedies.
The settlement "represents an enormous step forward," New York Attorney-General Eliot Spitzer said. Connecticut's Richard Blumenthal said the accord "holds the promise of making the market in this industry more competitive."
Microsoft stock, which surged more than 6 percent Thursday, fell US$0.44 to US$61.40 on Friday. The company's shares have risen 40 percent since the suit was filed in May 1998, compared with a 22 percent increase in the S&P's Computer Software and Services Index.
The agreement would end a fight that at one point threatened to transform the computer industry by splitting Microsoft in two.
Microsoft would escape without having to strip any programs out of its flagship product, the Windows operating system software that runs 95 percent of the world's personal computers.
Microsoft will be scrutinized on a daily basis by an independent technical team of three paid for by the company and with an office at its Redmond headquarters. The team will ensure Microsoft complies with the judgment and work with the company's compliance officer to make sure that: ■ Rival software developers are given the code to Windows XP within 12 months so they can develop compatible products. The code to new versions of Windows should be made available before commercial launch. The same goes for server products. ■ PCs that include Microsoft products should not automatically load Windows when first switched on, allowing consumers to choose to use a different operating system. Users should be able to install their own icons on the desktop and using Microsoft applications should not immediately call for the installation of other Microsoft software. ■ Microsoft will be banned from retaliating against manufacturers considering selling PCs that use other operating systems. ■ Microsoft will no longer be allowed to offer cheaper licenses to manufacturers such as Dell and Compaq if they exclusively install its software. It must make uniform terms available.
Source: The Guardian
Microsoft Chairman Bill Gates, accused of arrogance by the case's original trial judge, sounded a conciliatory note today.
The protracted legal battle "has had a profound impact on me personally and our company," he said. "We will focus more on how our actions affect other companies."
Microsoft still faces a separate probe by the EU into the emerging market for the "server" software that powers large computers running corporate networks.
Although the server business wasn't a central issue in the Justice Department case, the code-sharing provision in the settlement would apply to server software. The provision will prevent Microsoft from using its Windows monopoly to restrict competition from rival servers, the Justice Department said.
Microsoft reached the deal with a Republican Justice Department that long ago signaled it was less enthusiastic about the case than the Democrats who filed it when Bill Clinton was president.
President George W. Bush's administration previously announced it would abandon a breakup of Microsoft that was ordered by a federal judge and overturned by an appeals court.
Justice Department antitrust chief Charles James said the agreement "brings certainty and stability to the computer industry."
The proposal would "obtain relief that stops Microsoft from engaging in unlawful conduct, prevent any recurrence of that conduct in the future and restore competition in the software market," he said.
At a hearing today, US District Judge Colleen Kollar-Kotelly gave the states until Tuesday, when she will hold another hearing, to decide whether to endorse the accord. The states requested the extra time so they could exercise "due diligence," said Iowa Attorney General Tom Miller.
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