Ruling Resolves User Uncertainty

Microsoft rivals angered by judge's 'rubber stamping' of DOJ settlement

WASHINGTON -- Microsoft Corp. is no longer facing its worst fear: the unbundling of Windows. And it's on firmer ground to plan product strategies as a result of last week's court ruling.

Microsoft isn't out of danger - the company faces legal action in Europe and private antitrust cases. But U.S. District Court Judge Colleen Kollar-Kotelly's decision Friday came down so decidedly in favor of the company and the settlement reached with the U.S. Department of Justice that further legal challenges by the nonsettling states are unlikely.

Microsoft can therefore operate with a greater degree of certainty with customers, business partners and competitors. And that knowledge came none too soon for some users.

"We all know Microsoft isn't perfect. IBM is not perfect. No one is perfect. I want it to be over," said Steve Sommer, CIO at Hughes, Hubbard & Reed LLP, a law firm in New York.

Sommer said his chief concern is that the decision "doesn't slow down research and development and the innovation" that's due with Microsoft's Trustworthy Computing initiative and .Net technologies.

Other users lashed out at the ruling.

"Obviously, we would like [Microsoft] to open as much code as possible to keep competition alive," said Rick Peltz, CIO at Marcus & Millichap Real Estate Investment Brokerage Co. in Encino, Calif. "What it sounds like to me is [the judge] chose not to do anything" after delaying the original settlement for a year.

Kollar-Kotelly in fact gave little to the states, and rejected all their major remedy demands, including making Internet Explorer open-source and porting Office to rival operating systems.

Groups representing competitors were disappointed with the outcome.

"It's a rubber stamp," said Ed Black, who heads the Computer & Communications Industry Association in Washington. "It's a shame; it's a loss for innovation. It's such a bad decision that it leaves good grounds for appeal."

Legal experts said the one-sided decision will make it difficult for an appeal to succeed. "An appeal is almost a fruitless effort," said Hillard Sterling, an antitrust attorney in Chicago. "Appellate courts almost uniformly affirm these types of remedy decisions. This decision is virtually bulletproof."

Microsoft has already taken steps to comply with the settlement, giving PC makers more flexibility and uniform terms, and application developers broader access to Windows interfaces and protocols, said analysts.

"A big win for Microsoft, and we expect very few changes," said Tom Bittman, an analyst at Gartner Inc. in Stamford, Conn. "They've already adopted a lot of the behavioral changes internally. We expect to see very few changes from this ruling, per se. So don't expect something different tomorrow from Microsoft. Those changes have already been made."

In a statement, Microsoft called the settlement "a tough, but fair, compromise." It added that the settlement imposes significant requirements, but it "enables us to continue to innovate and to create products that address the changing needs of our customers."

Friday's ruling calls for Microsoft to form a compliance committee that includes its board members. Paul Neilson, CIO at Monster.com in Maynard, Mass., questioned the prudence of that decision.

"The fox is watching the chicken coop," he said. "And we know that this fox raids the chicken coop."

Maryfran Johnson, Carol Sliwa and Todd R. Weiss contributed to this report.

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