US sees flaw in Microsoft settlement compliance

Microsoft still hasn't fully complied with a key provision in its landmark antitrust settlement with the US government, the US…

Microsoft still hasn't fully complied with a key provision in its landmark antitrust settlement with the US government, the US justice department has told a federal judge.

In a report to the judge, attorneys with the department said they "remain concerned" about the price Microsoft plans to charge competitors to view the inner workings of the Windows program, a requirement under the anti-trust settlement.

The department is still not satisfied with the royalty structure and rates Microsoft has proposed to charge for access to computer code needed to make server software function properly with the Windows operating system.

The licensing terms could be important to companies such as Sun Microsystems that are battling Microsoft in the market for software that runs servers, the powerful machines that manage computer networks.

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As part of the settlement, Microsoft had promised to license the computer code, or protocols, on "reasonable and non-discriminatory" terms.

However, Microsoft rivals, who opposed the settlement, have since complained to the department that the licensing terms are anything but reasonable.

In April, under pressure from the department, Microsoft said it had agreed to make it cheaper and easier for competitors to license the code.

The Justice Department told the judge that complaints about the license terms made up the majority of the 18 "substantive" complaints about Microsoft compliance.

The department is particularly concerned that competitors have access to the server protocols because the provision is - in the judge's words - the most "forward-looking" part of the settlement, which is designed to restore competition.

The Justice Department agreed to the settlement in November 2001, saying the business restrictions in it would restore competition to the software business and prevent Microsoft from engaging in anti-competitive tactics.

Other terms of the settlement gave computer makers greater freedom to feature non-Microsoft software, allowing them to hide some Microsoft icons on the Windows desktop.