Part of Microsoft pact seen failing

WASHINGTON -- One of the most important provisions of the antitrust settlement negotiated with Microsoft Corp. is falling short of the federal government's hopes that it would energize rivals of the world's largest software maker, the Justice Department acknowledged yesterday.

US antitrust lawyers told the trial judge they are increasingly uneasy that efforts to persuade competitors to license Microsoft's Windows technology for their own software products "are not likely to spur the emergence in the marketplace of broad competitors to the Windows desktop."

The landmark antitrust settlement compelled Microsoft to offer its technology to competitors to build products that seamlessly communicate with computers running Windows software. Government lawyers described that requirement as a big step toward restoring competition. But they told US District Judge Colleen Kollar-Kotelly that Microsoft's licensing agreements have turned out to be too complex and potentially too expensive. The Justice Department said Microsoft has agreed to change the agreements. But, they warned, Microsoft "cannot foresee with confidence that the improvements will be sufficient and remove the need for further changes." Authorities in Massachusetts, the only state still pursuing tougher penalties, also criticized the company's license offers as ineffective. Attorney General Thomas F. Reilly disclosed that his lawyers were investigating claims Microsoft has planned an intensive campaign against unspecified rival Internet search engines and against Adobe Systems Inc.