The US Justice Department has claimed first blood in its legal battle with Microsoft, but the software supplier has so far escaped a $1 million a day fine.
In a 17-page ruling issued yesterday, US District Court Judge Thomas Jackson ordered Microsoft to stop forcing PC suppliers to distribute its Internet Explorer browser with the Windows 95 operating system.
He added that the possibility of Microsoft reinforcing its Windows 95 monopoly, while also monopolizing the Internet browser market, "is simply too great to tolerate indefinitely until the issues are finally resolved."
But he rejected a Justice Department request to fine the software giant $1 million a day for what it claims are violations of a 1995 court order restricting the bundling of software products.
He admitted that Microsoft's claim - that there is a provision in the consent decree allowing it to integrate products - was a plausible defense. "Given the present record, the court cannot conclude by 'clear and convincing evidence' that Microsoft violated a 'clear and unambiguous' prohibition found in the consent decree," he ruled.
The judge said that forcing Microsoft not to bundle IE with the Windows 95 "will not cause a significant hardship" for the company since it also sells the software separately. "Microsoft will remain free to market and promote (IE) just as it presently does, or in any other manner it sees fit, so long as (manufacturers) are given the choice of whether or not to accept the product."
In a surprise move, Jackson referred the dispute to Lawrence Lessig, a law professor specializing in computers and cyberspace, setting a deadline of 31 May 1998 for Lessing to produce his opinion.
A Microsoft spokesman described its reaction to the ruling as "mixed". In a statement, the company said: "We're confident that once the court has reviewed all the facts it will agree that Microsoft complied fully with the consent decree and that Microsoft's integration of Internet Explorer with Windows 95 is good for consumers."
A spokeswoman for rival browser supplier Netscape said the company was very pleased with the decision. Documents submitted to the court by the Justice Department revealed that PC manufacturers were barred by Microsoft from installing Netscape Navigator on their machines in some cases.
She added: "We're anticipating a whole new round of competition."
Shortly before the ruling was made public, Microsoft announced that there are now up to eight million IE users worldwide, a figure based on the fact that 10,000 corporations have licensed the Internet Explorer Administration Kit.
It also wheeled out a new total cost of ownership (TCO) study by Interpose, which claims that companies could save as much as $1,000 per computer per year in a typical corporate environment by standardising on Internet Explorer 4.0.
In a separate announcement, Yell, the Web site of UK Yellow Pages, was named as an official UK search engine for IE 4.0. Yell will be used to access a variety of UK-specific resources - from learning about local insurance companies to the latest music sites.
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