Nov 3, 2002 3 min read

WASHINGTON (AP) – Consumers switching on a Windows computer in coming months could see important new changes, including prominent links for programs such as music and chat software from some of Microsoft’s biggest corporate rivals. But a court’s decision not to impose tougher penalties than those negotiated with the Bush administration means Microsoft’s flagship software will remain mostly unadulterated as the engine for the technology industry and for its own extraordinary profits.

U.S. District Judge Colleen Kollar-Kotelly approved only minor changes in the 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 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.

She said the states demanding tougher penalties showed “little respect” for those earlier appeals rulings and their arguments were “unjustifiably in conflict” with those same rulings. The judge in the earlier Microsoft trial, Thomas Penfield Jackson, charged through until he was removed for conducting secret interviews with reporters during the case.

Unlike Kollar-Kotelly, who remained stoic throughout a 32-day hearing earlier this year, 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 Internet 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. Friday’s decision by Kollar-Kotelly was far more favorable for the software giant.

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

Officials for the nine losing states also were studying their options. 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.”

His colleague, Richard Blumenthal of Connecticut, who has been among Microsoft’s harshest critics, struck a more defiant tone: “The last chapter has not been written,” he said. Although Microsoft’s most prominent court battle seemed headed toward resolution, the company’s antitrust troubles are not over.

It 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.