Microsoft Yields to European Regulators

Microsoft's concession comes after a series of smaller settlements with other sovereign and private interests. Last week, Microsoft dropped its appeal against South Korea's antitrust regulator.

Analysts say Microsoft's conciliatory approach is also aimed at improving its public image.

"Compared to a decade ago, there's more public interest in the outcome of these suits because people are realizing the connections between antitrust behavior and what kind of prices and capabilities they can have," said Brent Williams, an analyst at the Benchmark investment firm.

Still, many analysts were surprised that Microsoft allowed the European court's ruling to stand because, they say, the decision is likely to force the U.S. high-tech industry to permanently change the way it operates abroad.

"The European court took a more aggressive stance on tying provisions," or the practice of selling products bundled together, said Brendan Barnicle, analyst at Pacific Crest Securities. He said companies might now be hesitant to sell multiple software products as a package, for example.

The ruling also sets a precedent for how consistent companies must be in sharing proprietary technical information, according to Bill Page, a professor at the University of Florida Levin College of Law.

Page said Microsoft had shared its technical information with other technology companies when it had less market share, because that enabled it to grow. But eventually the company tried to protect its dominance by clamping down on how much information it shared, a move that undermined Microsoft's case, he said.

"One concern that firms might have now is . . . 'Should we ever share compatibility information with other services? Because once we do, that may be held against us in the future.' "

Special correspondent John Ward Anderson in Paris contributed to this report.