Federal Appeals Court Rejects Microsoft, Govt Requests

A federal appeals court Thursday rejected Microsoft Corp.'s request that it reconsider part of its ruling in the four-year antitrust case; it also rejected the government's request to speed the case back to a lower court.

Microsoft had asked the U.S. Court of Appeals for the District of Columbia on July 18 to re-examine a portion of the ruling that found the company illegally "commingled" computer code of its Internet Explorer browser and the Windows operating system to protect its monopoly power -- a centerpiece in the antitrust case.

Opposing Microsoft, government prosecutors had argued that the case should be moved quickly in the wake of a June 28 appeals court ruling that Microsoft abused its monopoly in the market for personal computer operating systems.

The ruling sends the landmark antitrust case back to a lower court to decide Microsoft's penalty for being an illegal monopoly. The decision also clears the way for a lower court judge to be picked -- unless Microsoft decides to appeal to the Supreme Court.

The appeals court ruled that Microsoft had operated as an illegal monopoly and harmed consumers. At the same time, the court reversed Judge Thomas Penfield Jackson's order breaking up the company, narrowed the number of antitrust violations against Microsoft and said another lower court judge would decide the penalty.

In October, Microsoft's new Windows XP operating system is scheduled to reach store shelves. Windows XP includes many more added features, and has brought criticism from state attorneys general, Microsoft competitors and members of Congress.

Competitors argue Microsoft uses the operating system to dominate the market for other technology; Microsoft contends it simply is adding features users want.

-- Reuters and the Associated Press contributed to this report.