Microsoft OKs two-year extension of antitrust accord with government

Rivals are granted access to proprietary technology

April 22, 2004|By BLOOMBERG NEWS

WASHINGTON - Microsoft Corp. agreed to a two-year extension of a provision of its antitrust settlement with the government. The offer addresses concerns that the world's largest software maker was slow to grant competitors access to some of its Windows code.

Microsoft agreed to the extension after the U.S. Justice Department and 18 states complained that the company failed to provide useful technical information for software code that lets competing programs communicate with Windows. Competitors can choose to license the code for two years after the court-approved consent decree expires in November 2007.

Microsoft lawyer Charles F. Rule told U.S. District Judge Colleen Kollar-Kotelly that the licensing option also would apply to the next version of the Windows operating software.

Antitrust enforcers concluded that Microsoft must make a "substantial revision" to technical documentation "to make it useful" for competitors to use the code "across a broad range of implementations," government lawyer Renata B. Hesse told Kollar-Kotelly.

By extending the option to the new versions of Windows, dubbed Longhorn by Microsoft, competitors will get "access to technology they wouldn't otherwise have," Hesse said.

The licensing provision is part of the antitrust settlement negotiated in 2001 after a U.S. appeals court ruled that Microsoft had illegally protected its Windows monopoly. Antitrust enforcers expressed concern in a filing last week that further delays might reduce the provision's "useful life."

The decree requires Microsoft to give computer makers freedom to promote rival programs, such as RealNetworks Inc.'s media player. Microsoft's extension lasts for two years or until the next generation of Windows is released.

Rule said Microsoft thinks the 5,000 pages of technical documentation that it had drafted two years ago "is in compliance with its obligations" under the agreement Kollar-Kotelly approved in 2002.

The company is committed to "improving the documentation on an ongoing basis," Rule said, and remains committed to working with antitrust enforcers and competitors "to make sure the decree is a success."

Microsoft will make the changes by September, and a new team of technicians will help companies understand it, he said.

Kollar-Kotelly said she was "pleased" that the company and the government implemented a process for improving the licenses and the technical manual.

Last year, Microsoft agreed to streamline licensees' terms and "substantially" reduce the royalty payments it had been charging competitors for access to the code.

The judge said a "major addition" to the program was the decision by Sun Microsystems Inc., a maker of servers and a competitor of Microsoft in the corporate-network market, to license the communications code as part of a $1.6 billion settlement of the companies' antitrust and patent litigation.

Microsoft's shares rose 12 cents to close at $25.45 yesterday.

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