U.S.: Consumers win under partial Microsoft settlement

Computer-makers can remove IE browser if they choose

January 22, 1998
Web posted at: 11:11 a.m. EST (1611 GMT)

WASHINGTON (CNN) -- Microsoft and the Justice Department announced Thursday a partial antitrust settlement under which computer manufacturers that license Microsoft's Windows 95 operating system can delete the desktop icon for Microsoft's Internet Explorer browser.

But other aspects of the government's antitrust suit against Microsoft remain unresolved.

The surprise announcement was made by attorneys for the two sides at a previously scheduled hearing on the antitrust case before U.S. District Court Judge Thomas Penfield Jackson.

Assistant Attorney General Joel Klein described the settlement as a big win for consumers.

He said it showed that technology companies developing innovative computer software would not be "snuffed out by Microsoft's exercise of monopoly power."

"We are pleased to have worked out a settlement of this very preliminary aspect of the case, " said Bob Herbold, Microsoft Chief Operating Officer. "We believe we have been complying fully with the court's preliminary order, but we think it's important to put the compliance question behind us so that we can focus on the real issues involved in the case."

The settlement resolves the Justice Department's charge that Microsoft had violated the December 11 order from Judge Jackson by offering computer makers a version of Windows without Internet Explorer that was either out of date or would not work.

However, the settlement does not cover the larger Justice Department charge that Microsoft had violated a 1995 consent decree forbidding the company from forcing computer makers who license Windows to also use other Microsoft software.

"We are continuing to pursue that matter," Klein said.

Microsoft faces up to a $1 million-a-day fine if Jackson holds the Redmond, Washington-based firm in contempt for violating the consent decree.

The Justice Department alleged that Microsoft used its monopoly power to illegally drive out competition.

As a result, critics said, Microsoft can -- if it chooses -- put almost any computer manufacturer at a competitive disadvantage by denying it a license to install Windows in its products.

Windows is the operating system software found in the majority of personal computers.

The federal government, aware of the potential abuse of that monopoly, forced Microsoft to sign the consent decree. In that agreement, the company promised not to force computer makers to install other forms of Microsoft software as a condition of getting access to Windows.

In its suit, the Justice Department said Microsoft violated that agreement by telling computer manufacturers that if they wanted to license Windows, the computer firms also would have to take Internet Explorer.

Special Section:

• Target: Microsoft

Related stories:

• Judge denies Microsoft bid to get rid of court expert - January 14, 1998
• Has Microsoft complied? 'A resounding no,' Justice Dept. says - January 13, 1998
• Judge sets contempt hearing in Microsoft antitrust suit - December 19, 1997

Related sites:

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• Microsoft - Corporate Information
• U.S. vs. Microsoft - Brief archive

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