Microsoft strengthened:

The federal court decision on Friday endorsing a settlement that closes the U.S. government's landmark antitrust case against Microsoft Corp. will allow the software giant to leverage its dominance in computer operating systems to move into other markets, experts and rivals said.

That is good news for Microsoft's allies, such as Intel Corp., Siebel Systems Inc. and others, but bad news for the raft of companies including Oracle Corp, Sun Microsystems Inc. SUNW.O and RealNetworks Inc struggling to compete with Microsoft, they said.

....Competitors, however, were distrustful or resigned, while consumer advocates and industry analysts warned that the ruling was a step back from allowing freer choice in the market for technology.

"This just means there is no way around the Microsoft citadel. They just can't breach it," said Roger Kay, a PC analyst at research firm International Data Corp. "Microsoft owns the desktop and may come to own the living room."

Ken Wasch, president of the Software Information Industry Association, a trade group for the software and digital content industry, said: "We expect Microsoft to use many of the same tactics that enabled them to gain dominance on the desktop and the browser to gain dominance in other areas," such as handhelds and streaming media.

"The proposed remedies won't stop Microsoft from forcing out competitors and taking away consumer choice," said Edmund Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

However, an economist says ruling is tough:

Brookings Institution economist Robert Crandall demonstrates in the study released today that the settlement is not only strong, but is by far the most intrusive imposed by the federal government in any similar litigation since World War II.

Commenting on today's ruling in light of his new study, Crandall said: "In my latest study, I've reviewed 180 antitrust cases, and I've found that today's ruling in the Microsoft case imposes tougher penalties than those in any similar case since the end of the Second World War.

"Despite the toughness of these measures, however, I take a hopeful view of how this decision will impact competition. While it's hard to predict how competition will unfold in the high-tech sector, it is, after all, a very dynamic sector, with falling prices and ever-improving products.

"Primarily, I take heart from the fact that today's decision puts to rest four-and-one-half years of litigation. It is difficult for companies and people to be creative when they are uncertain about the rules of the road and whether or not they will be allowed to enjoy the fruits of their innovation and investments. As long as this litigation was pending, uncertainty hovered over innovation like a dark cloud. The big news today is that this uncertainty has been dispersed.

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