The Department of Justice has announced it will not seek a breakup of Microsoft as the two parties head into the final phase of the trial, but will ask for behavioral remedies.
As well, the government informed Microsoft it would not pursue the claim that Microsoft illegally tied its Internet Explorer browser to its operating system.
The government said it was taking the steps in "an effort to obtain prompt, effective and certain relief for consumers."
Pursuit of the tying claim before Judge Colleen Kollar-Kotelly would have added at least a year to the trial, said legal experts.
Instead, the Department of Justice said there is already ample ruling against Microsoft for illegal monopoly maintenance under Section 2 of the Sherman Anti-trust Act to obtain significant remedies against the company.
"In view of the Court of Appeals unanimous decision that Microsoft illegally maintained its monopoly over PC-based operating systems - the core allegation in the case - the Department believes that it has established a basis for relief that would end Microsofts unlawful conduct, prevent its recurrence and open the operating system market to competition. Pursuing a liability determination on the tying claim would only prolong proceedings and delay the imposition of relief that would benefit consumers," said the Department of Justice in a statement.
The change in position could set the stage for a settlement, which has thus far proven elusive.