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Microsoft agrees to alter its Windows XP software

Microsoft Corp has agreed under pressure to change its Windows software to resolve complaints by the Justice Department that it unfairly influenced how customers buy their music online, the government said Thursday.

Microsoft will offer updated software for its Windows XP operating system in February or March to stop its disputed practice of compelling consumers who buy music on the Web to use only Microsoft's Internet browser. The company continues to maintain its design was legal.

Government antitrust lawyers concluded that the design violated the landmark antitrust settlement approved by a federal court in October 2002.

They were expected to meet next week with US District Judge Colleen Kollar-Kotelly and Microsoft lawyers to more broadly describe the company's efforts to abide by terms of the settlement.

A Microsoft spokeswoman, Stacy Drake McCredy, said the company agreed to the redesign for business reasons.

"While we differed in our interpretation of the consent decree, we are pleased that the changes we'll be making also address the government concerns about this feature," she said.

A statement from the Justice Department said the government was pleased with the decision "regardless of the reason for the change."

The latest dispute centers on a design feature in Windows called "Shop for Music Online," which lets consumers purchase compact discs from retailers over the Internet.

When consumers click the link to buy music, Windows opens Microsoft's browser even after consumers specify that they prefer using rival browser software.

The link -- prominent whenever a computer user opens a designated folder containing songs -- steers Windows users to a Web site, windowsmedia.com, operated by Microsoft with links to online retailers, such as Buy.com or CDNow.

The Windows behavior does not affect consumers who use a rival Internet browser to directly visit other music sellers, such as Apple Computer Inc's new iTunes site or the Rhapsody service from Listen.com.

The dispute affected one of the central tenets of the antitrust settlement: improving the ability of rival software vendors to compete against Microsoft's own programs running on Windows.

One settlement provision allows Microsoft's own programs to override competitors only if rival software "fails to implement a reasonable technical requirement."
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