Microsoft alters Windows configuration rules

Reacting to last month's antitrust case ruling by the U.S. Court of Appeals in Washington, Microsoft Corp. Wednesday announced immediate changes in its Windows OEM licensing policies that give computer makers -- and, ultimately, corporate users -- more leeway in how they configure desktop versions of the operating system.

Microsoft said it will give PC makers the option to remove Internet Explorer entries and icons from the Windows start menu, instead including the Web browser within the "Add/Remove Programs" feature in the upcoming Windows XP release. IE will also be able to be dropped from earlier versions of the operating system, including Windows 98 and Windows 2000, it added.

In addition, Microsoft said, computer vendors will now be allowed to retain the option of putting icons directly into the Windows desktop. The software giant previously planned to ship Windows XP, which is due out in October, with a "clean" desktop as part of a redesigned start menu.

Microsoft acknowledged that it was making the changes in light of the June 28 decision by the appeals court, which upheld a lower-court finding that the company used illegal means to maintain the monopoly status of Windows and that provisions in the licenses it required PC makers to sign impaired the competitive chances of rival Web browsers.

"We recognize that some provisions in our existing Windows licenses have been ruled improper by the court, so we are providing computer manufacturers with greater flexibility," Microsoft CEO Steve Ballmer said in a statement. "And we are doing this immediately so that computer manufacturers can take advantage of [the changes] in planning for upcoming release of Windows XP."

Wednesday's announcement "does not take the place of settlement discussions with the government parties or any future steps in the legal process," Ballmer added. "However, we wanted to take immediate steps in light of the court's ruling." Microsoft officials are "hopeful" that the company, the U.S. Department of Justice and the states involved in the antitrust case can resolve other issues related to the decision, he said.

During the antitrust trial and the subsequent appeals process, Microsoft argued repeatedly that Internet Explorer couldn't be separated from the rest of the operating system. But the company said Wednesday that all the changes it's making can be completed before the scheduled Oct. 25 launch of Windows XP, "although some of these changes will require development work and testing."

In the wake of the appeals court's ruling, legal and industry analysts said the decision could end up giving users the ability to pick choose and choose between some applications that Microsoft plans to integrate with future versions of Windows. However, some users noted that it would be difficult to switch to non-Microsoft products because of budgetary and training issues. And analysts said PC makers may decide not to replace Microsoft applications with rival ones in order to avoid increased technical support responsibilities.

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