Microsoft settles with DOJ, will unbundle IE!

Microsoft Corporation and the U.S. Department of Justice (DOJ) have settledtheir dispute over the bundling of Internet Explorer with Windows 95. Thetwo sides announced on Thursday morning that Microsoft will comply moresatisfactorily with Judge Jackson's injunction and not force OEMs to bundleIE with Windows.

In what is viewed as a significant victory for the DOJ, Microsoft is nowoffering OEMs two choices: a version of Windows with Internet Explorer 4.0,or a version of Windows without it. This decision also affects OSR 2.5 (anupcoming version of Windows 95) and Windows 98, which is due later thisyear. Contrary to prior plans, Microsoft will now offer a version of OSR 2.5 that does not include Internet Explorer 4.0 or the Active Desktop.

"Today's decision is a victory for consumers and innovators," said JoelKlein, the head of the DOJ's antitrust division. "Competitors and innovators should know that their products can compete on their own merits and not be wiped out by Microsoft's use of monopoly power. That's what competition is all about in America."

Microsoft's senior VP for law and public affairs, Bill Neukom, said he waspleased with the agreement because it allows his company to move on to theappellate phase. The appeal is set for April 21. Microsoft says the courtproceedings will have no effect on the release of Windows 98, which is due between April and June of this year