With over 90% of the browser market, Microsoft is now happy to let Internet Explorer be added to the operating system's "add/remove programs" list.
This is just one of the changes Microsoft is allowing to its control of the desktop in the release of Windows XP.
In 1996 Netscape had over 90% market share in the browser market, but this year the situation had reversed, with Microsoft's Internet Explorer gaining over 90%.
Microsoft's inclusion of IE as an integral part of its operating system was at the heart of the Department of Justice's case against the software producer's alleged abuse of its monopoly position.
The US Appeals Court ruled that Microsoft should not be broken into two companies, but upheld a judge's ruling that the company engaged in illegal behaviour befitting of a monopoly. It ruled that certain provisions in Microsoft's licences with the OEMs (original equipment manufacturers) thwarted the distribution of third-party web browsers.
In a move underscoring the pressure Microsoft has been under to be more flexible with OEMs, the software maker is now allowing OEMs to offer its operating system completely free of the company's Internet Explorer (IE) browser, if they so choose. Microsoft will allow the OEMs to remove the start menu entries and icons that provide end users with access to components of IE. OEMs will retain the option of putting icons on the desktop on Windows XP even though the company designed XP to have a "clean desktop". The rules also extend to Windows 98, Windows 2000 and Windows ME.
Microsoft CEO Steve Ballmer said in a statement: "We recognise that some provisions in our existing Windows licences have been ruled improper by the US court, so we are providing computer manufacturers with greater flexibility. We are doing this immediately so that computer manufacturers can plan for the upcoming release of Windows XP.”
Microsoft's move doesn’t come as a surprise to Mark Schechter, partner at Howrey Simon Arnold & White and a former official in the US Department of Justice's antitrust division. The software maker clearly realises that the Appeals Court didn't criticise the District Court's conclusion that Microsoft's way of dealing with OEMs is out of line and contributes to its monopoly power, he says.
"What the government alleged and the District Court found is that Microsoft had monopolised the OS market by making it difficult for competitors to have access to the distribution channel -- PC OEMs," he says. "And it did it by sharply limiting the rights of OEMs to make various types of changes to the (Windows) desktop screen," which in turn made it difficult for OEMs to put competing software there, in particular browsers.
"The Appeals Court essentially affirmed that part of the judgment," and Microsoft is aware of that, Schechter adds.