After four years of court battles, Microsoft yesterday appeared to have won its antitrust war with the government.

A federal judge approved most of a settlement reached last year between the world's largest software company and the Justice Department.

Nine states sought tougher sanctions than those contained in the settlement, but U.S. District Judge Colleen Kollar-Kotelly mostly found their arguments "not supported by any economic analysis."

The judge even amended the settlement to give Microsoft some leeway to police itself.

Microsoft can appoint its own compliance board and director, instead of answering to a technical panel with Justice Department and industry watchdogs, as previously recommended.

PAGE 13Settlement conditions will last five years.

State attorneys general did not rule out more appeals, though legal experts gave them little chance of prevailing.

"We haven't fully digested the opinion yet," said Iowa Attorney General Tom Miller. "We still have plenty of fight."

Microsoft co-founder Bill Gates, perennially ranked as the world's richest man, greeted the decision as "a good compromise and a good settlement."

Chief Executive Steve Ballmer said Microsoft has "learned and grown" during the legal skirmishes, and pledged to "move forward as a responsible leader in an industry that is constantly, constantly changing."

U.S. Attorney General John Ashcroft also hailed the deal, saying it provides "certainty and stability" to the computer industry and will enhance competition.

Microsoft stock closed at $53, down 47 cents, before yesterday's ruling, but rose in after-hours trading.

Kollar-Kotelly's decision requires Microsoft to disclose some sensitive technology to competitors months earlier than the settlement initially proposed.

Microsoft cannot cut exclusive deals to hurt rivals, nor can it retaliate or threaten retaliation against computer makers who opt for non-Microsoft products.

Computer makers must be offered the same contract terms, with a few exceptions, and manufacturers and customers must be free to remove icons for certain Microsoft features.

Microsoft says it already has taken some of these steps. It's easier for consumers to use rivals' music players and instant-messaging features, for instance.

Quoting Niccolo Machiavelli, the Renaissance philosopher, the judge warned Gates and Microsoft to heed the settlement: "Let it not be said that 'a prince never lacks legitimate reasons to break his promise,'" Kollar-Kotelly wrote.

The case started as a fight over Internet browsers.

The Justice Department accused Microsoft of illegally wielding its clout -its Windows operating systems run 90 percent of all personal computers -to give a decisive edge to Microsoft's Internet Explorer browser over Netscape's competing product.

Microsoft was found to have broken antitrust laws to preserve its monopoly over operating systems.

The Clinton administration wanted to split Microsoft in two, but the breakup was spiked by an appeals court. The Bush administration pushed for a settlement.

"Overall, I think this is a good decision," said economist Nicholas Economides of New York University. "If there are no appeals, it will clear the landscape so everyone will know the rules of the game."

Microsoft's victory is consumers' loss, countered Robert Lande, a University of Baltimore law professor. He blamed the judge's inexperience with antitrust cases and technology for killing "meaningful choices" in the software market.

"Microsoft violated antitrust laws, and it's going to be allowed by the Bush administration to get away with it. They got away with a big one here," the professor said.

Rob Enderle, a research fellow for the Giga Information Group, said the decision should boost Microsoft's immensely popular stock. Whether competition ultimately is enhanced may hinge on how vigorously the deal is enforced, however.

"A lot of people think this is a light slap on the wrist and won't affect anything," Enderle said.

California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia and the District of Columbia had opposed the settlement.

Attorneys general from five of those states yesterday tried to claim partial victory, insisting they held Microsoft's feet to the fire and helped closed some loopholes in the Oct. 31, 2001, accord.

"We sought more and we got more," said Connecticut Attorney General Richard Blumenthal. He said yesterday's decision tells Microsoft it will be held accountable, adding: "The last chapter has not been written."

Blumenthal said states will seek reimbursement of legal costs from Microsoft, though he could not specify how much. The Microsoft case has become a political issue in Connecticut, where Blumenthal is up for re- election.

AOL Time Warner, which now owns Netscape, is suing Microsoft for illegal acts that dethroned the browser. Sun Microsystems also is suing Microsoft, a company with a market value of $287.6 billion - more than the gross domestic products of at least 150 countries.

________________________________________________________________________ _____________________ Kevin Coughlin covers technol ogy. He can be reached at kcough lin@starledger.com or (973) 392-1763. Star-Ledger wire services contrib uted to this report.