Microsoft rolls on with Windows XP

In the wake of the Court of Appeals decision, Microsoft chairman Bill Gates said the company will roll forward with its aggressive new initiatives in the PC and web markets, including the launch of its upcoming operating system, Windows XP, on 25 October.

"We're moving ahead with Windows XP as a product that has the features consumers want," he said. "There's nothing in the ruling that changes our plans, including Windows XP."

At the same time Gates was speaking, US attorneys general, representing the 19 states that sued Microsoft in 1999, said they wanted the Justice Department to demand harsh remedies to prevent potential future monopolistic violations in Microsoft's upcoming operating system.

Richard Blumenthal, the attorney general for Connecticut, said he hoped the ruling would "change Microsoft's conduct". He said he and his colleagues wanted the company at least to reduce plans to bundle applications with Windows XP.

New York attorney general Eliot Spitzer said that if there was a new hearing, it should examine how Microsoft plans to position its new operating system.

"Probing Microsoft's behaviour and strategy with Windows XP would be important for a judge in terms of understanding the reach of any remedy that is put in place," Spitzer said.

The statements follow mounting complaints from antitrust experts and lobbyists, who said Microsoft is still using the type of monopolistic business tactics that prompted the original case.

Mike Pettit, president of ProComm, a group formed by Microsoft rivals Oracle, Sun Microsystems, Netscape and others, said: "I think Microsoft's practice of bolting every feature to Windows will end. The court said we will balance anti-competitive harm with any consumer benefit Microsoft will claim."

Iowa attorney general Tom Miller said that because of Microsoft's more aggressive tactics, the Justice Department and 19 states would be keeping a close eye on the software maker's conduct.

"The company's recent announcements regarding Windows XP and Hailstorm indicate to us that Microsoft may be repeating its efforts to maintain and extend its monopoly even more broadly into the internet," Miller said.

Merrill Lynch analyst Henry Lodget summed it up: "As with previous versions of Windows, we believe that much of Microsoft's strategy with XP is to render third-party software and services irrelevant."