Details of the plan--and the reversal--were contained in a quarterly status report that Microsoft and the Department of Justice filed on Thursday with the federal judge that oversees the company's .
Microsoft has been trying to find ways to make portable music players that run its software compete better in a market dominated by Apple Computer's iPod player and companion iTunes software. Under the program Microsoft had proposed, device makers that included a CD with Windows Media Player and other software would have had to agree not to include any other software, including rival media players.
"When Microsoft circulated a draft of the specification to a number of manufacturers, the draft specification said that if the company chose to include the CD with its music players, it had to do so on an exclusive basis; that is, the company could not also distribute those music players with additional software, including alternate media players," Microsoft and the Justice Department said in the filing.
A Microsoft spokeswoman said that the plan had not gotten a full legal review and that it would have been caught by the processes that the company has put in place.
"This was only a draft description that we sent to device manufacturers for the purpose of getting feedback," Microsoft spokeswoman Stacy Drake said. Drake said that the company acted quickly after receiving an objection from one unnamed device maker. "Our legal team reviewed the description and promptly revised it."
In the filing, the Justice Department called Microsoft's move "unfortunate," but did not ask the judge to take any further action. Both parties are due before on Wednesday.
"While it is unfortunate that the draft specification contained the exclusivity provision, Microsoft took quick steps to correct this error and plaintiffs do not believe any further action is required," the Justice Department said.
Also in the filing, Microsoft noted that it is working on a plan for Windows Vista, the next version of the operating system, that would extend customization options beyond those in Windows XP.
In XP, people can change the default icons and programs, but the changes apply to all users of that computer. With Vista, Microsoft is looking into whether it can allow such choices to be made by each user sharing a computer.
"Plaintiffs are very encouraged by the direction of these discussions and believe there is an opportunity to substantially improve the methods for setting default middleware applications in Windows Vista, as compared to the current Set Program Access & Defaults ("SPA&D") mechanism used in Windows XP," the Justice Department said in the filing.
The regulators said they will continue to review the issue and expect to consider it at a previously scheduled meeting next month.
In June, Microsoftto Windows XP as a result of concerns brought up by a committee reviewing the software giant's compliance with the antitrust accord.