Microsoft and the US Justice Department say they have agreed to modify their anti-trust settlement in an effort to address criticism that loopholes within the settlement.
In legal briefs filed with US District Judge Colleen Kollar-Kotelly last night, both sides described the changes as refinements.
"The modifications announced today simply make this effective settlement even better," said Mr Charles James, the department's anti-trust chief.
The department filed the changes as part of a 239-page brief defending the settlement deal and responding to public comments submitted earlier this year.
Microsoft said the changes would more accurately reflect the intent of the parties and address some of the misperceptions of the proposed decree.
Nine of the 18 states involved in the lawsuit against Microsoft agreed to sign on to the deal, but nine others are still pursuing the case and seeking tougher sanctions against Microsoft to prevent future anti-trust violations.
In the brief, Microsoft agreed to broaden some technical definitions and redefine some terms that critics had argued could be used as loopholes to get around the restrictions in the deal. Critics were saying the unmodified agreement would allow the company to seize computer makers' patented technologies.
Microsoft said it also had agreed to drop a provision that required computer makers to license some intellectual property to Microsoft.
In a landmark ruling on the case in June, a federal appeals court upheld a lower court conclusion that Microsoft had used illegal tactics to maintain its Windows monopoly but rejected splitting the company in two to prevent future violations.
The dissenting states, which include California, Massachusetts and Iowa, say their remedies would close a series of loopholes in the Justice Department settlement. It also would force Microsoft to sell a cheaper, stripped-down version of its monopoly Windows operating system and disclose the inner workings of Windows.
In a separate filing on Wednesday, Microsoft asked Ms Kollar-Kotelly to dismiss the stringent antitrust sanctions that some state attorneys general want to impose on it, saying the states are trying to displace the Justice Department's decision to settle the case.
The judge said she will hold a hearing starting March 6th on whether the proposed settlement is in the public interest. Separate hearings on the demands for tougher sanctions will begin March 11th and will likely run for 6-8 weeks.