In a retreat from a long-held insistence on dictating the content of customers' computer desktops, Microsoft Corp. announced Wednesday that it would allow computer makers to remove the shortcut to the company's Internet Explorer browser.
The decision, made in response to a recent appeals court ruling that Microsoft violated antitrust laws, appears to be aimed at smoothing the way to a negotiated settlement of the bitterly fought case.
Late last month, the U.S. Court of Appeals in Washington threw out a lower court order to break up Microsoft, but the panel upheld a ruling that Microsoft abused the monopoly power of its industry-standard Windows operating system.
Among the excesses cited by the court was Microsoft's requirement that computer makers ship machines with specific Microsoft icons on the desktop including one for the Internet Explorer Web browser as a condition of receiving Windows, which runs the vast majority of the world's personal computers.
Using leverage from Windows, Internet Explorer swamped Netscape Navigator to become the leading software for piloting through the Internet.
The changes in the licensing agreements take effect immediately. That means computer makers can act on them in time for the release of Microsoft's Windows XP operating system, due Oct. 25.
But the decision is limited to Internet Explorer and does not allow computer makers to remove other Microsoft software icons from Windows, said Shawn Sanford, a company spokesman.
PC makers also can add icons for other programs such as RealNetworks Inc.'s popular RealPlayer or AOL Time Warner Inc.'s AOL Internet access service to the initial screen, Reuters reported.
The move marks a dramatic shift from Microsoft's adamant assertions that it had done nothing wrong in making manufacturers feature Internet Explorer in exchange for receiving Windows.
The announcement "makes a settlement more likely" by removing a contentious issue from the case, said Hillard Sterling, a Chicago antitrust attorney, who has been a critic of the government case. "Microsoft is positioned to argue that no more relief is necessary."
But Tom Miller, attorney general of Iowa and spokesman for the consortium of states pursuing the antitrust case, said that if the announcement was limited to Internet Explorer, it would not mean much because Microsoft already had succeeded in crushing Netscape.
"The browser wars are over, Miller said. "Microsoft has won them. They've got their (browser) monopoly."
Although much of the publicity about the court of appeals decision focused on anti-Microsoft comments by the trial judge, the decision gave the government a relatively strong hand to play in negotiating a remedy with Microsoft, said Herb Hovenkamp, a law professor at the University of Iowa.
Hovenkamp also is a former adviser to the government side of the case.
"I'd be pretty disappointed if the Justice Department settled for something this wussy, and I know the states won't," Hovenkamp said.