Microsoft Offers Concessions to PC Makers

By Peter Galli  |  Posted 2001-07-11 Print this article Print

Microsoft Corp. on Wednesday announced major concessions relating to the inclusion of its Internet Explorer browser in the Windows operating system, following the recent findings of a U.S. Court of Appeals that a number of its past licensing policies were

Microsoft Corp. on Wednesday announced major concessions relating to the inclusion of its Internet Explorer browser in the Windows operating system, following the recent findings of a U.S. Court of Appeals that a number of its past licensing policies were "restrictive, anti-competitive and violated Section 2 of the Sherman Act."

Microsoft today said it had taken action as "the appeals court ruled that certain provisions in our licenses with PC manufacturers impaired the distribution of third-party Web browsers."

As such, it will allow computer manufacturers to retain the option of placing icons directly on the Windows desktop. While Microsoft has touted the "clean and uncluttered" aspect of the desktop in the upcoming Windows XP, and wants to limit the number of icons allowed, "PC manufacturers will now have the option of continuing to place icons on the Windows desktop if they want to," the company said in a statement.

Sources said this effectively means that OEMs themselves could now place, say, an AOL icon on the desktop. Microsoft and America Online Inc. could not be immediately reached for further comment.

Microsoft will also now allow PC manufacturers to remove entries and icons in the "Start" menu that provide end users with access to Internet Explorer. Microsoft will include Internet Explorer in the Add/Remove Programs feature in Windows XP.

Computer makers will further have the option of removing the Start menu entries and icons that provide end users with access to Internet Explorer from previous versions of Windows, including Windows 98, Windows 2000 and Windows ME.

Consumers will now be able to use the Add/Remove Programs feature in Windows XP to remove access to the Internet Explorer components of the operating system, Microsoft said.

First step toward settlement?

The Redmond, Wash., company remained upbeat that it would be able to complete the development work and testing required for this in time to still meet its worldwide Windows XP launch date of October 25.

In a statement, Steve Ballmer, Microsofts CEO, said: "We recognize that some provisions in our existing Windows licenses have been ruled improper by the court, so we are providing computer manufacturers with greater flexibility and we are doing this immediately so that computer manufacturers can take advantage of them in planning for the upcoming release of Windows XP."

While some observers say this move could pave the way for a negotiated settlement with the Department of Justice and the 19 state attorneys general involved in the antitrust case, Ballmer said this announcement "does not take the place of settlement discussions with the government parties or any future steps in the legal process."

But Ballmer remained positive about a settlement. "We are hopeful that we can work with the government parties on the issues that remain after the courts ruling," he said.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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