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 WASHINGTON (AP) - Microsoft Corp., already under government scrutiny over its behavior toward competitors, told manufacturers of iPod-like portable audio devices that under a new marketing program they would not be allowed to distribute rivals' music player software but pulled back after one company protested.
The Justice Department said that the incident was "unfortunate," but that government lawyers decided to drop the issue because Microsoft agreed 10 days later to change the proposal. The government disclosed details of the dispute in a federal court document made available Thursday.
The disputed proposal described in the court document as a "draft specification" would have affected portable music players that compete with Apple Computer Inc.'s wildly popular iPod. The plan would have precluded manufacturers of those devices from distributing software to consumers other than Microsoft's Windows Media Player in exchange for Microsoft-supplied CDs.
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