Microsoft Corp responded to a ruling it illegally defended its Windows monopoly by freeing computer makers to remove links to its Internet Explorer Web browser.
A US appeals court on June 28 overturned a trial judge's order to split the company in two while upholding findings it illegally protected its Windows dominance. Microsoft's bundling of its Internet Explorer Web browser into Windows, along with license restrictions on computer makers, prevented distribution of a rival browser, the court said.
Microsoft spokesman Jim Cullinan said on Wednesday the company isn't giving computer makers permission to remove other features of Windows XP, the latest version of the operating system that runs 90 percent of the world's personal computers. Due on the market Oct. 25, Windows XP will include software to play digital music, make Internet telephone calls and edit digital photographs.
State antitrust experts say bundling of these applications would hurt competition, and they may seek court-ordered changes.
They downplayed the significance of Wednesday's announcement by the software giant.
"Microsoft has won the browser war," said Iowa Attorney General Tom Miller, a leader of 19 states that joined the US Justice Department in suing the company. The company already has thwarted browser competition from Netscape Communications Corp, now part of AOL Time Warner Inc, he said. "What are they offering? What is the change?"
A continued refusal by Microsoft to let computer makers remove the Windows Media Player or other applications bundled into Windows XP and substitute programs made by other software companies "would be troublesome," Miller said.
"We are taking this step today to address specific violations identified by the court of appeals," Cullinan said. "Nothing in the court of appeals decision addresses other technologies in Windows."
The company said it was making the changes because "some provisions in our existing Windows licenses have been ruled improper by the court, so we are providing computer manufacturers with greater flexibility," Microsoft Chief Executive Steve Ballmer said in a statement. Ballmer said the company hopes to work with the government to resolve remaining issues.
Redmond, Washington-based Microsoft shares rose US$2.02 to US$66.50. The stock has gained 53 percent this year. The company also announced that its fiscal fourth quarter sales were US$6.5 billion to US$6.6 billion, beating forecasts, while profit from operations was in line with expectations.
"Microsoft is clearly scrambling," said AOL Time Warner spokeswoman Kathy McKiernan, referring to the company's response to the appeals court ruling. "But they still have a long way to go to address the anti-consumer, anti-competitive elements of Windows XP."
AOL Time Warner and Microsoft were unable to agree on terms under which America Online's software would remain in the next version of Windows.
Justice Department spokeswoman Gina Talamona had no comment.
Legal experts were also skeptical. Microsoft's concessions reflected "a very narrow reading of what the court required," said Andrew Gavil, an antitrust expert at Howard University law school.
"I don't know how that addresses the problem of Microsoft's misuse of its monopoly," said Herbert Hovenkamp, an antitrust expert at the University of Iowa law school.
RSS