Microsoft, DOJ file revised settlement proposal

Microsoft Corp., the U.S. government and nine U.S. states revised their proposal to settle the long-running antitrust case against the software maker. Filed with a federal court late Wednesday, the revised proposal further restricts Microsoft in its dealings with PC makers and forces it to treat competitors’ software in an unbiased manner.

The Second Revised Proposed Final Judgement, as the document is officially known, is an update to the proposed settlement reached in November last year between Microsoft, the U.S. Department of Justice (DOJ) and nine U.S. states. Nine other U.S. states and the District of Columbia are still pursuing the case against Microsoft; they oppose the settlement and want Judge Colleen Kollar-Kotelly to impose far-reaching remedies on Microsoft.

The settlement proposal was refined on the request of the U.S. government after reviewing public comments, Microsoft said in a filing accompanying the revised proposed settlement with the U.S. District Court for the District of Columbia.

Scrapped in the updated settlement proposal is a clause that, opponents charged, allowed Microsoft to require PC makers and other special licensees to give up their intellectual-property rights. The states opposing the settlement only last week asked the same court to reject the original proposed settlement because Microsoft was using that clause to force PC makers to waive their patent rights.

Microsoft bargained for this clause during negotiations for the settlement proposal. It contends that it is meant only to protect itself from claims of indirect patent infringement, not to be able to freely use customers’ inventions and compete with them at the product level, as was suggested by the nonsettling states. The confusion led Microsoft to agree with the DOJ’s request to drop the specific section of the proposed settlement, Microsoft said in its filing.

The changed settlement proposal also forbids Microsoft from promoting its own middleware applications, such as an Internet browser or media player, over those supplied by competitors. End users of the Windows operating system should be allowed to launch competing software, instead of the Microsoft application, via an “unbiased mechanism,” according to the updated settlement.

Microsoft, the DOJ and the settling states ask Judge Kollar-Kotelly to approve the settlement as final judgment. Hearings on the document are set for next week.

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