Microsoft receives settlement backing

WASHINGTON — A U.S. appeals court on Wednesday unanimously approved the landmark antitrust settlement Microsoft Corp. negotiated with the Justice Department, setting aside objections by Massachusetts that sanctions were inadequate against the world's largest software company.

In a significant victory for Microsoft and the Justice Department, the appeals court ruled 6-0 that the settlement was "in its entirety" in the public's interest. The decision relieves Microsoft's biggest courtroom headache in the United States.

In exuberant language, the U.S. Court of Appeals for the District of Columbia Circuit applauded provisions of the complex settlement that permit computer makers to hide Microsoft's built-in Web browser software so that consumers can more seamlessly use software from Microsoft's rivals.

"We say, Well done!" the court wrote.

Microsoft's top lawyer, Brad Smith, described the 83-page decision as a "clear and emphatic message" that its settlement with the Bush administration was proper.

The Bush administration's top antitrust official, Assistant Attorney General R. Hewitt Pate, called the ruling a "resounding victory for the Justice Department and American consumers."

The appeals court said an alternate settlement proposal from Massachusetts to require Microsoft to remove parts of its software from the dominant Windows operating system could hurt consumers by leading to a confusing world with different versions of Windows.

"Letting a thousand flowers bloom is usually a good idea, but here the court found evidence . . . that such drastic fragmentation would likely harm consumers," the court wrote.

The court also rebuffed a plan by Massachusetts to require Microsoft to reveal the secret blueprints for its Web browser, saying such a move might help the company's rivals but not help competition flourish.

The court did permit two anti-Microsoft trade organizations in Washington, the Computer and Communications Industry Association and the Software and Information Industry Association, to seek tougher sanctions against Microsoft.

But the appeals judges predicted their efforts would lead nowhere, saying the groups' arguments have "no merit," and noting that the lower courts have already considered and rejected many of those arguments.

Massachusetts' attorney general, Tom Reilly, said the appeals court had shirked its responsibility for enforcing U.S. antitrust laws and granted Microsoft status as a protected monopolist.