Officials Brief Bush About Next Steps in Microsoft Battle

White House staffers last week briefed President Bush about the government’s possible next steps in the antitrust battle with Microsoft Corp., a move that some experts said suggests the four-year battle with the software company is nearing a critical juncture.

The Justice Department and 18 states that are suing Microsoft aren’t planning to seek an injunction against the release of Windows XP, the company’s next operating system, government sources said this week.

That means if a federal appeals court decides not to put off proceedings while the Supreme Court weighs Microsoft’s appeal this week of a finding that it broke monopoly laws, the case could soon turn to how to punish the firm.

Separately, Reps. Jay Inslee and Jennifer Dunn, a Democrat and a Republican, respectively, from Microsoft’s home state of Washington, sent a letter--co-signed by 120 members of Congress--urging the Justice Department and the states to settle.

“Antitrust enforcement should be about protecting the American consumer, not deciding winners and losers among wealthy competitors,” the letter stated.

As a presidential candidate, Bush voiced reservations about the Microsoft case, particularly a court order to break up the company. The order was later overturned.

“I’m against it,” Bush said in March 2000. “There has got to be a better remedy than to break up a successful company that employs lots of people.”

On Thursday, Microsoft announced another restriction to its policy giving computer makers greater control over the icons and promotional offers they can install on new machines.

After the appeals court determined that several Microsoft licensing requirements violated antitrust laws, the company said in July that it would allow PC makers to remove Microsoft icons and “Start” menu links for its two Web browsers, Internet Explorer and MSN Explorer.

AOL Time Warner Inc. then moved to have PC makers install an AOL symbol.

Microsoft officials first said any new set of desktop icons would have to include a symbol for its MSN Internet access service. On Thursday, the company said a Windows Media Player icon also must be featured.

“There they go again,” said AOL Time Warner spokesman John Buckley. “Their message to consumers, to computer makers and to the government is: ‘We own the computer desktop, and there’s not a thing you can do about it.’ ”

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Bloomberg News was used in compiling this report.