Microsoft, DOJ Reach Settlement

Microsoft Corp. today agreed to a broad range of restrictions, which include a panel of full-time monitors to oversee its practices and its books, to settle antitrust charges and end its long-running court battle with the Department of Justice, the govern

WASHINGON, D.C. – Microsoft Corp. today agreed to a broad range of restrictions – including a panel of full-time monitors with full access to its code and its books -- to settle antitrust charges and end its long-running court battle with the Department of Justice, the government announced.

The settlement, presented this morning to U.S. District Judge Colleen Kollar-Kotelly, requires Microsoft to provide other software developers with the interfaces to its middleware so that competitors can develop products that will work smoothly with the Windows operating system.

That requirement will extend to all technologies that have the potential to be middleware threats to Microsofts operating system monopoly – including browsers, e-mail clients, media players, instant messaging software and future middleware developments.

The proposed settlement also prohibits Microsoft from mandating what products computer makers place on their desktops, requires the company to provide uniform licensing terms to PC makers, and prohibits Microsoft from retaliating against computer and software makers for supporting or developing competing software.

"This settlement will promote innovation, give consumers more choices, and provide the computer industry as a whole with more certainty in the marketplace," said Charles A. James, Assistant Attorney General for the Antitrust Division, in a statement announcing the settlement.. "The goals of the government were to obtain relief that stops Microsoft from engaging in unlawful conduct, prevent any recurrence of that conduct in the future, and restore competition in the software market–we have achieved those goals." The settlement has been nearly four years in the making. And during and after the hearing, most everyone involved in the case cited the terrorist attacks of Sept. 11 as providing an impetus to get this off the Justice Departments plate.

Microsofts lead attorney, John Warden, said the "The greatest beneficiary of this settlement is the national interests. The settlement is good for parties and for consumers."

The attorneys general from New York, Connecticut and Iowa said that the Sept. 11 attacks had changed the tenor of the negotiations. Connecticut Attorney General Richard Blumenthal called the attacks a "powerful dynamic."

It was unclear Friday, however, whether the 18 state attorneys general who had joined the Justice Department in the anti-trust suit would back the settlement terms. The states asked for more time to review the proposal. Kollar-Kotelly scheduled another hearing for Tuesday morning.

Even if all parties sign off on the document, Kollar-Kotelly indicated it would be early February before a settlement could be finalized.

If approved, Microsoft will be required to follow the restrictions for at least five years. A panel of three independent, on-site, full-time computer experts who would have full access to all of Microsofts books, records, systems, and personnel, including source code to monitor the companys conduct.

The settlement would resolve the landmark anti-trust case filed against Microsoft in 1998. Kollar Kotellys predecessor, Judge Thomas Penfield Jackson, had found the company guilty and ordered it broken up.

An appeals court, however, removed Jackson from the case and ordered parts of the case remanded to trial. Still, the appeals panel found that Microsoft had broken antitrust law and that it should be punished for illegally maintaining its operating system monopoly.