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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