Gates: Settlement ‘the right thing to do’

Associated Press

WASHINGTON — More than a decade after the government began investigating how Microsoft does business, the two asked a judge Friday to approve a hastily written final chapter in the historic monopoly case that could reshape the future of computing.

The proposed settlement of antitrust charges would require Microsoft to give independent monitors full access to its books and plans for the next five years and to provide information to help rivals make their products compatible with the dominant Windows operating software.

With the once-defiant Bill Gates on board, U.S. District Judge Colleen Kollar-Kotelly gave the 18 states also suing Microsoft until Tuesday to decide whether to sign on to the deal.

Microsoft and the Bush administration said they hoped the settlement would help the flagging economy by reinvigorating the multibillion-dollar computer industry, which has fallen flat after years of enormous growth.

"The settlement goes further than we might have wanted," Gates said, but it "is the right thing to do."

"The settlement will help strengthen our economy during this difficult time and ensure that our industry can continue delivering innovations to the marketplace."

Friday’s action could mean the end is near in the biggest antitrust case since the 1984 breakup of AT&T. If computer manufacturers and competing software developers push the agreement to its limits, consumers could see dramatic changes to the familiar Windows desktop.

They won’t see differences on their computers for several months, but U.S. Attorney General John Ashcroft said they will benefit from the proposed settlement.

"It provides prompt, effective and certain relief," Ashcroft said. "This settlement is the right result for consumers and for businesses, the right result for the economy and the right result for government."

Gates, who as Microsoft’s chairman vigorously fought the charges first brought by the Clinton administration, was more conciliatory than usual.

"We will focus more on how our actions affect other companies," he promised.

While President Bush long supported a settlement, Ashcroft said the White House didn’t meddle in the case.

Under the agreement, customers could buy a computer with both Windows and the free Linux operating system installed. They could see America Online’s instant messaging software appear instead of Windows Messenger when they turn their computer on. Or they could buy a computer with oversized icons promoting a Dell or Gateway partnership.

Over time, customers "will get a greater number of bundled choices," Giga Information Group analyst Rob Enderle said.

While the agreement is intended to encourage rival software companies to get their products onto a computer’s coveted out-of-the-box "first screen" and therefore threaten Microsoft’s monopoly power, it is far from certain that this will happen.

Also unclear is how the agreement will affect Microsoft’s plans to use the Internet to bring in more customers.

One provision strongly supported by the states requires that competing companies be given the technical information needed to have their computer server software work as well with Windows as Microsoft servers. Microsoft chief executive Steve Ballmer declined to say whether that would affect Microsoft’s upcoming Internet services.

"We have pretty good latitude in terms of our design of integrated new products," Ballmer said. "But along with that flexibility also comes a set of obligations, in terms of licensing and disclosure."

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