Microsoft Corp has agreed to a broad range of restrictions -- including a panel of independent monitors to oversee its conduct and books -- in order to settle antitrust violations and end its epic courtroom fight, the Justice Department said yesterday.
Under the deal to be presented to a judge, Microsoft would provide rival software developers with information to allow them to develop competing products, and ensure those products work with the software giant's flagship Windows operating system, the government said.
The settlement imposes a "broad range of restrictions that will stop Microsoft's unlawful conduct," the Justice Department said in announcing the deal being presented to US District Judge Colleen Kollar-Kotelly.
PHOTO: AP
The restrictions would be imposed for five years, and could extended for another two years if Microsoft failed to follow the terms, the government said.
Microsoft would also allow a panel of three independent experts to reside on its premises and work full-time to ensure the software giant complied with the settlement, Justice officials said. The experts would have access to the programming code that is the blueprint of Microsoft's Windows software.
"These experts will have full access to all of Microsoft's books, records, systems and personnel, including source code, and will help resolve disputes about Microsoft's compliance," Justice said.
The deal, if approved by the judge, would bring to an end a historic antitrust case in which the American icon that helped drive the computer revolution was judged to be an illegal monopoly that thwarted competition.
The states who joined the Justice Department in bringing the case against Microsoft have not yet signed onto the deal, and planned to ask Kollar-Kotelly for more time to study the details through next week.
The proposed settlement marks a sudden shift in a case that began under the Clinton administration, which sought to break Microsoft into two for its antitrust violations.
A judge originally agreed to do that, but was reversed by a federal appeals court. The Bush administration took a breakup off the table before starting negotiations this fall.
President George W. Bush has long urged a settlement in the case but the White House remained on the sidelines during the final days of negotiations led by Justice Department antitrust chief Charles James.
Critics complained the deal doesn't go far enough to ensuring Microsoft won't engage in the same practices that led to the monopoly charges. Government officials countered it would prohibit the software giant from entering into exclusive deals with computer sellers to squeeze out rival products.
"This historic settlement will bring effective relief to the market and ensure that consumers will have more choices in meeting their computer needs," Attorney General John Ashcroft said yesterday.
James said the deal would also "promote innovation, give consumers more choices and provide the computer industry as a whole with more certainty in the marketplace."
Microsoft will be required to provide software developers with interfaces for its browser, e-mail programs, media players and other Windows additions so that rival developers can write programs that work with those features.
The settlement would also require non-Microsoft Internet server software to work with Windows on a personal computer just as well as Microsoft servers do.
And Microsoft must license its operating system to key computer makers for five years and can't require manufacturers to exclusively support Microsoft software. The company will also be prohibited from retaliating against companies that support competing products.
Senior Justice lawyers and Microsoft executives decided to press forward without full cooperation from their state partners in the case and to present the deal to Kollar-Kotelly. She has strongly urged the sides to settle since taking over the complex case in August.
The states decided Thursday to ask the judge to give them until the middle of next week to review the settlement.
Lawyers for the states pressured their federal counterparts unsuccessfully this week to seek tougher penalties. Some states also argued Microsoft can't be trusted to abide by promises to reform its business practices. The current case stems from charges that the company violated a related 1995 agreement with the Justice Department.
James similarly lobbied states individually to break from the group. None did. Iowa, Connecticut, Wisconsin and California were among the most resistant to any immediate settlement, along with Ohio and Kansas.
If states decide to reject the settlement, they could object during upcoming public hearings under so-called "Tunney Act" proceedings in an effort to scuttle the deal or they could decide to pursue the case separately in court.
But legal experts cautioned it was unclear how effectively states could influence terms during consideration by the trial judge, since she has expressed such strong desire for a settlement.
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