News

Analysts Unfazed by Microsoft Oversight Ruling

Analysts are seeing little reason for concern over a federal judge's decision to keep Microsoft Corp.'s competitive business practices under court scrutiny for an additional two years.

Neither Microsoft's behavior nor its balance sheet is likely to be affected, said Charles DiBona, an analyst at Sanford C. Bernstein & Co.

"They still compete, they still like to win, but I think they realize the tone of that competition, for business reasons as much as legal reasons, was well-served by being modified," DiBona said Wednesday in an interview.

The analyst added, "remember that this isn't the only watchdog on the street any more," referring to ongoing scrutiny in Europe.

A U.S. judge ruled late Tuesday that the consent decree enforcing a landmark antitrust settlement reached among Microsoft, the federal government and 17 states would remain in effect until November 2009. A group of 10 states led by California and New York had requested the oversight be extended until November 2012.

U.S. District Court Judge Colleen Kollar-Kotelly said she based her decision on delays by Microsoft in filing technical documents related to the licensing of its software. She said the ruling "should not be viewed as a sanction against Microsoft."

Microsoft said it would continue to fully comply.

Microsoft shares were down 40 cents, or 1.2 percent, to $32.20 Wednesday.

Microsoft faces even tighter scrutiny in the European Union, where regulators have opened two antitrust probes -- one over the practice of giving away Internet Explorer with the Windows operating system and the other to determine if Microsoft withholds technical information from competing software makers.

As a result, Microsoft has been careful in its design of new products. For example, instead of bundling the suite of free Windows Live software with new computers, it requires users to download the programs.

The antitrust settlement barred the software company from seeking deals with computer makers to exclude competing software and aimed to keep Microsoft from using its operating system monopoly to stifle competition in other products.

Most of the 2002 decree was to expire in November 2007. The group of 10 states argued late last year that the oversight process may not have had "enough traction to enhance long-term competition" among makers of computer operating systems.

The states also said allowing some clauses of the decree to expire would jeopardize the effectiveness of the whole. Microsoft took strong exception in its court filings, but Judge Kollar-Kotelly accepted the states' claim.

The Bush administration did not join the states' request. The Justice Department said Microsoft had complied with the settlement, and the decree should be allowed to expire.

Featured

comments powered by Disqus
Most   Popular

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.