Microsoft-DOJ settlement FAQ

WASHINGTON--The Justice Department and Microsoft have agreed to settle whether Microsoft is in contempt of a court order to unbundle Internet Explorer from Windows 95. Still wondering what really happened in the high-profile antitrust case? Below are the frequently asked questions on today's contempt hearing and what it means.

What are the new licensing options that Microsoft is offering to PC makers?
Two new options are available to computer manufacturers, in addition to the option of shipping the full version of Windows 95 complete with the Internet Explorer browser. First, these original equipment manufacturers, or OEMs, can make available a version of Windows with the Internet Explorer icons removed from the operating system's desktop and start menu. In this version, the roughly 26 files that constitute Internet Explorer itself would also be removed.

That's essentially what you get after running the Add/Remove utility in Windows 95 and removing Internet Explorer. IE itself is not present in this version of Windows, nor is the Internet Connection Wizard or files providing access to AT&T Worldnet, one of the Internet access providers bundled with the operating system.

In the second new option, OEMs can ship a version of Windows 95 that has been stripped of the IE icons but still has all files intact, as well as the Internet Connection Wizard and AT&T Worldnet access. Under either option, Microsoft said all third-party applications that rely on Internet Explorer Web browsing services, such as Quicken or Norton Utilities, will function properly.

What does this settlement mean for Windows 98?
In the short term, nothing. Today's developments simply mean that Microsoft is now in compliance with a court order requiring it to offer PC makers a version of Windows 95 without Internet Explorer. The bigger questions--whether Microsoft can integrate new features into its operating system and whether it can force OEMs to ship one product as a condition of licensing another--are still very much alive. Microsoft chief operating offer Robert Herbold said the impact of today's settlement on Windows 98 "is unclear."

The company continues its beta-test program for the operating system and plans to ship it according to its previously announced schedule. However, Herbold said the company "will look to this case to clarify the options going forward for software development and integration issues."

That means the company wants to be sure that it's free to add new features, such as speech recognition, to Windows. As far as the Justice Department is concerned, the issue of Windows 98 is still under investigation.

What did Microsoft gain and lose as a result of today's decision?
Gains: Microsoft says it established that Internet Explorer and Windows 95 are indeed integrated products that cannot easily be separated. The decision could also bode well as a precedent for the company in future discussions of what it can or cannot include as part of Windows 95. And Microsoft dodges the threatened $1 million daily fine it could have been forced to pay had it been found in contempt.

Losses: If you judge the results based on the buzz around the courtroom this morning, Microsoft loses some credibility with OEMs, software developers, and users for not settling the Internet Explorer bundling issue earlier. If it's so simple to separate browser from operating system, why didn't the company interpret Judge Thomas Penfield Jackson's earlier decision with a bit more common sense and take action weeks ago, saving precious time and preserving its public image? After all, Jackson himself uninstalled IE in 90 seconds in a previous courtroom demonstration.

What did the Justice Department gain and lose?
Gains: The government succeed in making Microsoft bow to its wishes in making a non-Internet Explorer version of Windows 95--one that actually boots--available to PC makers. Joel Klein, assistant attorney general for antitrust, claims victory in this phase of its case, saying it strikes a blow for the little guys of the software world who are attempting to build a better mousetrap.

Losses: Microsoft claims that the Justice Department was inconsistent on what exactly it wanted the software maker to do. The government first asked for removal of IE but then settled on hiding the browser, causing confusion in the case. Granted, Microsoft took advantage of the apparent missteps to their fullest extent. But no matter how you look at it, the government doesn't appear too technically astute. And, in the final analysis, the side issue of the preliminary injunction only served to consume lots of time and resources.

For consumers, does today's decision mean there will be changes to PCs offered on store shelves?
Practically speaking, there will most likely be no visible and immediate impact to consumers. While computer manufacturers are now free to ship a version of Windows 95 without Internet Explorer, odds are that few will do so, if any. Microsoft's Herbold said he knows of no PC maker that has expressed interest in shipping PCs with Internet Explorer hidden or removed.

If, as a consumer, I buy a PC with a version of Windows 95 modified using either of the two new options, can I add Internet Explorer myself?
Yes. You'll have to either download IE from the Net, install it from a CD-ROM, or buy Microsoft's Internet Explorer Starter Kit.