Microsoft wins big antitrust battle

Microsoft has won a big victory in its antitrust battle with the US government when an appeals court overturned an earlier ruling against its controversial Internet software.

Two appeals court judges in Washington yesterday lifted a preliminary injunction which restricted Microsoft's packaging of Internet browser software with its flagship Windows operating system.

A third judge disagreed with the appeals court's decision, which comes just two days before the retail launch of Windows 98, the latest version of the operating software.

The court's opinion is likely to have a significant impact on the outcome of the landmark antitrust lawsuit launched by the US justice department and 20 states last month. This accuses Microsoft more broadly of acting as an illegal monopoly by using the dominance of Windows to crush competition from Netscape Communications, its Internet rival.

In yesterday's ruling, the court strongly backed Microsoft's arguments that bundling its internet browser with Windows was a technological improvement for consumers.

"Antitrust scholars have long recognised the undesirability of having courts oversee product design, and any dampening of technological innovation would be at cross-purposes with antitrust law," the court said.

It ruled that the internet browser was closely integrated with Windows, not a separate product as the government has consistently argued.

Microsoft's packaging of the internet browser with Windows should be treated in the same way as earlier improvements of the operating software such as Windows 95, the judges said.