Judge Oks Microsoft-Justice Pact

A judge approved a federal antitrust settlement with Microsoft Corp. Monday but the Justice Department said it’s still scrutinizing the software leader, which is about to launch the Windows 95 operating system.

The order covered a deal under which Microsoft halted some incentives to computer makers that prosecutors said reduced competition.

U.S. District Judge Thomas Penfield Jackson’s signature on the 13-month-old settlement ended a review made unusually long by another judge’s rejection of the agreement.

The first judge to review the settlement rejected it, but was overturned by an appeals court that sent the matter to Jackson.

In the agreement, Microsoft stops discounts to personal computer manufacturers that paid the company a royalty for each PC sold, even those that didn’t have Microsoft’s DOS or Windows software. The practice gave PC makers little incentive to install competing programs since they would have had to pay a royalty to both the competitor and Microsoft.

Jackson’s approval does not free Microsoft from examination, however. A Justice Department attorney, Donald Russell, told Jackson that the government is “investigating certain Microsoft practices to determine whether those practices are in compliance” with the July 1994 bargain.

After the hearing, Microsoft’s chief counsel suggested that the government would find nothing wrong.

“We’ve been in compliance since we entered into the consent decree with the government last July, and we intend to make every effort to continue to be in compliance,” William Neukom told reporters.