Microsoft federal government deal

In November 2001, Microsoft announced it had reached a tentative deal with most of its foes. As nine other states continued to...

In November 2001, Microsoft announced it had reached a tentative deal with most of its foes. As nine other states continued to push for tougher penalties, the software maker began implementing changes in its software and disclosure policies to adhere to that proposed settlement.

Under the terms of the settlement agreement, Microsoft must enable independent software vendors to develop competitive Windows middleware products. With the aim of creating a more diverse market for desktop software, including Web browsers, e-mail clients, media players, instant messaging software and future new middleware developments, Microsoft was required to provide software developers with the same application programming interfaces(APIs) and communication protocols it uses to build Windows-compatible software. Additionally, it must now disclose code to allow non-Microsoft server software to interoperate with Windows.

Microsoft must increase end-user access to third-party software, giving computer manufacturers the flexibility to install competing middleware products as the default applications that launch on Windows PCs. Hardware makers could still be required to ship Microsoft middleware on their PCs, but users would be able to remove access to those programs.

PC makers would also be free to ship dual-booting PCs that launch Windows in addition to a separate operating system. Microsoft has since developed a program called "Set Program Access and Defaults" that allows users to set default startups manually. That was made available with a set of updates and security patches released to Windows XP users in early September and drew criticism from competitors for being inadequate.

Microsoft was also required to license its operating system to 20 top computer manufacturers on uniform terms for five years to ensure that it does not punish licensees who distribute software that competes with Microsoft. The company has responded by publishing to a secure Web site the licensing fees it charges those top original equipment manufacturer partners.

The software giant must comply fully with the proposed final judgment. This is a broad requirement that would force Microsoft to license any intellectual property necessary to allow a competing software vendor or PC maker to exercise the rights granted by the consent decree. Microsoft would be able to collect reasonable royalties on any technology given to its partners and customers.

The creation of a technical watchdog committee made up of three independent, full-time computer experts, would be appointed to assist in enforcing the terms of the deal. The committee would be made up of one Microsoft appointee, one government appointee and a third member to be chosen by the first two appointees.

They would have offices at Microsoft's headquarters and would receive full access to Microsoft source code and its executives. Microsoft would also appoint its own internal compliance officer.

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