Microsoft Set to Make XP Modification

Microsoft Corp., in a concession to the increased scrutiny by Congress and the courts of its business practices, said Sunday it will make it easier for users of its upcoming Windows XP operating system to work with digital photography software from Eastman Kodak Co. and others.

Redmond, Wash.-based Microsoft said that when XP users attach a digital camera, they will get clearer choices about what photo software to use.

Before, the system would have launched a generic-sounding “camera wizard” that was actually Microsoft’s competing program, and Kodak complained that it took great effort to install the software that it ships with its digital cameras. Windows XP will start to become available next month, with an official roll-out Oct. 25.

“We think it’s significant, in that the consumer will have a number of visible choices,” said Kodak spokesman Anthony Sanzio. Kodak’s software allows users to edit, e-mail and use an inkjet printer to reproduce photos.

Microsoft also said it planned to certify as Windows-compatible software from Kodak and others that works only with those companies’ cameras, instead of requiring the companies to participate in Microsoft’s system for its own software and all camera makes.

Still under negotiation is Microsoft’s plan to charge Kodak and others for placement in a list of companies offering photo-finishing services online. No money changed hands in the agreement, both companies said.

“We still have some more to do,” Sanzio said. “We think we can resolve the outstanding issues with them.”

Microsoft, the maker of the dominant operating systems for personal computers, softened its stance on controlling the interaction between digital photos and Windows XP after Kodak took its case to lawmakers in Washington, antitrust officials and the news media.

Claiming Windows XP interfered with its own digital photography software, Rochester, N.Y.-based Kodak had blasted Microsoft as a monopolist that was trying to set up “toll booths” between Kodak and its customers.

At a Microsoft press event in New York to display the new photo features of Windows XP last month, Kodak used its exhibition booth to highlight the company’s concerns about the system.

Kodak also complained to New York Atty. Gen. Eliot Spitzer, who represents one of 18 states that joined the Justice Department in suing Microsoft, and to Sen. Charles E. Schumer (D-N.Y.). Schumer then urged government prosecutors to block the release of Windows XP unless it was modified.

Schumer told the Associated Press on Sunday that he was encouraged by Microsoft’s changes.

“All we are asking for is that other competitive products be given an equal place on the platform so consumers can make the choice,” Schumer said. “Hopefully this is the first in a series of steps so there’s fair competition.”

Microsoft spokesman Jim Cullinan said Sunday that Kodak had pledged to tell members of Congress it was happy with the shift. But he said there was no commitment that it refrain from testifying or otherwise helping federal and state prosecutors in their long-running antitrust lawsuit.

Microsoft has come under antitrust fire for bundling other software and services with XP as well, including instant messaging and icons for its Internet access plan, MSN.

Though it allows manufacturers more latitude than in the past, it is still forbidding computer companies to promote America Online, which has the No. 1 Internet service, on the Windows XP desktop above MSN.

A federal appeals court is considering whether to delay hearings on how to punish Microsoft for its monopolistic behavior while waiting for the Supreme Court to decide whether to hear arguments that a judgment against it be thrown out.

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Times staff writer Edmund Sanders contributed to this report.