Educators turning on new Windows computers in the coming months could see important new changes, including prominent links for programs such as music and internet software from some of Microsoft Corp.’s biggest corporate rivals.

But a court’s Nov. 1 decision not to impose tougher penalties than those negotiated with the Bush administration means Microsoft’s flagship operating system will remain mostly unadulterated as the engine for the technology industry and for the company’s own extraordinary profits.

In an enormous victory for Microsoft, U.S. District Judge Colleen Kollar-Kotelly approved only minor changes in the antitrust settlement. She will permit computer makers, for at least five years, to activate software from rivals as soon as a new PC is switched on by consumers. She also will prohibit Microsoft from threatening to retaliate against anyone who cooperates with its rivals.

The judge established a corporate committee—consisting of Microsoft board members who are not company employees—to make sure the company lives up to the deal, and she gave herself more oversight authority.

But she would not go further in punishing Microsoft, deriding arguments by attorneys general from nine states and the District of Columbia that tougher penalties were essential to restore competition in the technology industry. The judge said many of these additional proposals were developed chiefly to benefit Microsoft’s rivals, not consumers, and said the states’ legal strategy had been hopelessly flawed.

What a difference a judge makes.

Kollar-Kotelly, 59, proved a meticulous, enigmatic jurist unwilling to push the limits of earlier rulings on Microsoft by a federal appeals court.

She adopted a remarkably narrow view of the issues surrounding the case and indicated she was particularly skeptical over the failure to show how Microsoft’s business decisions hurt consumers, even as these actions proved devastating to technology rivals.

The judge in the earlier Microsoft trial, Thomas Penfield Jackson, occasionally lost his temper toward witnesses during a 78-day trial and laughed openly at Microsoft chief Bill Gates. Jackson also eagerly broadened the case beyond narrow questions surrounding web browser software and frequently butted heads with the appeals court.

When Jackson handed down his punishments, also overturned later by an appeals court, he ordered Microsoft split in two. The Nov. 1 decision by Kollar-Kotelly, which is the closest thing yet to a resolution in the case, was far more favorable for Microsoft.

Gates pledged a personal commitment to abide by the judge’s instructions, which he called “a good compromise and good settlement.” Microsoft’s lawyers expected to spend the weekend reviewing the decision, which covers hundreds of pages. But declared Gates: “We’re not seeing anything that would be cause for appeal.”

Officials for the nine losing states also were studying their options at press time. They could appeal the judge’s denial of additional penalties, although California’s attorney general, Bill Lockyer, acknowledged that after a four-year court fight, “We’re all fatigued.”

Microsoft and the government had argued that the settlement they secretly crafted one year ago was sufficient. The agreement:

  • Prevents Microsoft from participating in exclusive deals that could hurt competitors;
  • Requires uniform contract terms for computer manufacturers;
  • Allows manufacturers and customers to remove icons for some Microsoft features; and
  • Requires Microsoft to release some technical information so software developers can write programs for Windows that work as well as Microsoft’s own products do.

Microsoft’s extraordinary impact on everyday life is hard to understate: Its lucrative Windows and Office products are essential tools for American businesses, government agencies, and school districts, not to mention individual consumers.

The company’s market value of $287.6 billion exceeds the gross domestic product of at least 150 nations, including Saudi Arabia and Argentina. Its stock is among the most widely held by investors, especially among mutual funds and retirement accounts.

Among K-12 schools, Windows-based machines constitute more than 58 percent of the installed base of computers, according to research firm Market Data Retrival.

Most educational technology leaders who spoke with eSchool News said they were relieved the case appeared close to a resolution.

“I am glad that third-party products will be added [to Windows-based computers],” said Sandra Becker, director of technology for the Governor Mifflin School District in Pennsylvania. “I [also] appreciate the integrated nature of Windows XP for students and teachers. It is certainly easier to use and add devices.”

However, Becker said she’d prefer to have an independent consultant or legal representative oversee the settlement, rather than a corporate committee.

Although Microsoft’s most prominent court battle seems headed toward conclusion, the company’s antitrust troubles are not over.

Microsoft still faces private lawsuits by Sun Microsystems Inc. and AOL Time Warner Inc. And European antitrust regulators—who were awaiting the U.S. judge’s decision—have hinted they will announce sanctions against Microsoft by year’s end on related matters.

Links:

Microsoft Corp.
http://www.microsoft.com

Judge Colleen Kollar-Kotelly’s ruling
http://www.microsoft.com/presspass/trial/nov02/11-01opinion