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Thursday, 28 February, 2002, 23:52 GMT
Microsoft and US refine settlement
Department of Justice Logo and Bill Gates
The settlement comes under review next week
Microsoft and the US government have announced changes to their proposed settlement ahead of hearings next week.

The changes are an effort to respond to criticisms of the original settlement proposal made by nine states that refused to endorse the proposal and criticisms levelled during a public comment process.

The changes clarify the terms of technology sharing and restrictions on Microsoft's business relationships with computer makers and other technology companies.

The dissenting states and some legal experts have criticised the original proposal as vague and ambiguous. Microsoft's detractors feared that the company would use these ambiguities to continue its anti-competitive behaviour.

The settlement is currently under review by Judge Colleen Kollar-Kotelly. She has laid out a schedule for hearings that will continue into mid-May.

'Refinements'

Microsoft described the changes as refinements, and the Justice Department said the settlement is "a comprehensive remedy that puts into place meaningful, effective and enforceable restrictions on Microsoft."

However, the refinements included the deletion of an entire section that set a uniform licensing policy that dissenting states and some computer manufacturers including Sony said gave the software giant access to computer makers patents.

Under terms of the now deleted provision, PC makers would have to had "agree not to assert patent claims against Microsoft and Microsoft licensees," according to a filing by Sony. The Japanese technology company said that it had negotiated terms that exempted it from these patent provisions.

The dissenting states claimed that the settlement, including the licensing provisions, "has fostered new monopolistic practices."

Sony agreed, saying that the proposed settlement may weaken pro-competitive limitations "and allow Microsoft to leverage its power into other markets."

Microsoft also clarified language that provides for equal access under Windows to competitors' Web browsers, instant messaging programs and digital media software.

And the changes also expanded the type of technical information that Microsoft would share with competitors to allow their software to work with Microsoft's server software.

Response to criticism

It is the second time that the government and Microsoft have modified the proposal. The first round of changes won the approval of half of the 18 states involved in the case.

But nine states refused to sign on to the settlement and have pushed for additional curbs.

Judge Kollar-Kotelly decided to allow the case to proceed on two tracks.

One track allows the dissenting states to continue to pursue the anti-trust case and additional remedies not contained in the settlement proposal. Remedy hearings are set to begin March 11.

Microsoft has asked the judge to dismiss harsher remedies proposed by the dissenting states saying they were overstepping their authority by proposing remedies beyond the proposed settlement.

The other track is mandated by a US law called the Tunney Act, which requires the review of proposed anti-trust settlements.

The Tunney Act requires for a 60-day period to collect public comments, and during that time, some of Microsoft's competitors and computer makers including Sony.

The Justice Department received more than 30,000 comments over the 60-day period and said that 12,500 expressed opposition to the proposed settlement and 10,000 supported it. Some 9,500 comments expressed no opinion.

See also:

28 Feb 02 | Business
Little new in Microsoft settlement
27 Feb 02 | Business
Microsoft fights tougher sanctions
20 Feb 02 | Sci/Tech
Microsoft told to open Windows
16 Feb 02 | Business
Public critical of Microsoft deal
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