COURT of Appeals clears way for new district judge to set penalty for Microsoft

Friday, August 24th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ The U.S. Court of Appeals handed the government's antitrust lawsuit against Microsoft back to a lower court Friday, where a new judge will decide what penalty the software giant should face for antitrust violations.

The action follows the appeals court decision last week not to delay the case until the Supreme Court decides whether to hear Microsoft's appeal. Microsoft had sought such a delay.

The ruling opened the way for the appellate court to select a new judge to decide Microsoft's penalty.

U.S. District Judge Thomas Penfield Jackson found Microsoft guilty of antitrust violations last year and ordered the company split in two. But the company appealed that ruling, in part because of assertions that Jackson had shown bias against Microsoft.

The federal appellate court subsequently embraced Jackson's findings that the company had violated the law, but did not endorse his suggested remedy: that Microsoft be broken into two parts.

The development came as the Redmond, Wash.-based software giant released the final code for Windows XP to manufacturers, the last production step before Microsoft's new operating system can hit shelves in October.

A symbolic send-off _ via helicopter _ was planned for later Friday at the company's headquarters. Next, manufacturers will mass-produce the desktop operating system for distribution on new computers and in stores.

The official signoff virtually eradicated the possibility that Microsoft would tweak Windows XP in response to anticompetitive concerns. Politicians, competitors and some of the attorneys general who brought an antitrust suit against Microsoft have charged that with the new system, the software giant continues to use its dominance in the desktop market to muscle out competition.

Windows XP includes many new features that are currently standalone products made by competitors, including a music video player, an instant messaging system and DVD player.

Microsoft chairman Bill Gates said Friday that Windows XP is ``the best operating system Microsoft as ever built.''