Tentative Settlement In Microsoft Antitrust CaseTentative Settlement In Microsoft Antitrust Case

A tentative settlement between Microsoft and the Justice Department that could end their long-running antitrust case would require Microsoft to open its Windows APIs for wider review and limit the company's ability to use its licensing contracts as a competitive tool. But with Friday's court-ordered settlement deadline looming, and no evidence that the 18 states suing Microsoft have signed on to the preliminary pact, more negotiations appear likely before the case is closed.

After three weeks of settlement talks in Washington, D.C., under the oversight of court-appointed mediator Eric Green, a Boston University law professor, Microsoft and the Department of Justice have reportedly reached a deal that would establish a five-year consent decree between the software vendor and the federal government. According to reports, the deal would:

- Require Microsoft to disclose Windows APIs to software and hardware vendors in a "secure facility" where companies could study the code and ask questions

- Give PC makers greater freedom to install icons for non-Microsoft software on the Windows desktop screen

- Ban Microsoft from using Windows licensing terms to retaliate, or threaten retaliation, against software and hardware vendors that support non-Microsoft media players, instant-messaging software, Web browsers, and the Java programming language

- Require Microsoft to sell and support older versions of Windows for longer periods of time

The consent decree could be extended by two years if Microsoft is found to have violated its terms, and a three-member advisory panel of independent experts would be appointed to ensure compliance. The agreement appears to fall short, however, of restrictions on Microsoft's conduct advocated by the state attorneys general who joined the Justice Department case. Those 18 states say letting Microsoft bind products such as its Web browser and other client software and middleware to Windows violated a June appeals court ruling that banned Microsoft from "commingling" code. Last week, the state of California hired prominent trial lawyer Brendan Sullivan on behalf of the states, signaling the willingness of the attorneys general to proceed with more litigation.

U.S. District Court Judge Colleen Kollar-Kotelly in September set a Nov. 2 deadline for settlement of the case, otherwise returning it to court for remedy hearings. That deadline could be extended, according to reports.

Shares of Microsoft (Nasdaq-MSFT) were up $3.69 to $61.84 when the markets closed.