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The penalties, agreed by Microsoft and the US Department of Justice, were accepted by nine of the 18 US states that brought the anti-trust case against the company.

The other nine states rejected the settlement, but in a final ruling made on Friday Judge Colleen Kollar-Kotelly of the US District Court of Columbia dismissed almost every further penalty suggested by the nine.

In its worst-case scenario Microsoft could have been forced to reveal much of the Windows source code and provide other software companies with almost unfettered access to Windows desktops.

In fact, Microsoft must only make that code available which makes it possible for other companies'

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products to inter-operate properly with Windows, and is prohibited from tying PCs to Microsoft's software, excluding all others.

For example, Microsoft will no longer be able to prevent computer manufacturers from installing products such as Real Player and Netscape as well as or in place of Windows Media Player or Internet Explorer. Microsoft will also have to make it easier for Windows users to uninstall Microsoft applications and to launch non-Microsoft programs.

The judgement lasts for five years with a further two years possible if Microsoft violates any of the rules.

Microsoft welcomed the ruling as a 'tough but fair compromise'. In a brief statement it said, 'It imposes significant requirements on Microsoft, but it enables us to continue to innovate and to create products that address the changing needs of our customers.'

However its competitors were less happy. Sun Microsytems' lawyer Michael Morris said that 'the settlement will be ineffective in curbing Microsoft's monopolistic and anti-competitive practices'.

See also...
MS settlement rotten with loopholes
Judge backs MS-DoJ deal, Microsoft now in the clear