A group of state attorneys general said on Thursday that the consent decree that settled the landmark antitrust case against Microsoft Corp has failed to reduce the company's monopoly, disagreeing with the assessment of U.S. antitrust officials.

In a periodic review of the settlement, the U.S. Justice Department said Microsoft had lived up to the consent decree restricting its conduct. It also said the 2002 settlement had succeeded in promoting competition.

Microsoft was found to have unlawfully used its monopoly in personal computer operating systems to discourage computer manufacturers from loading non-Microsoft software on their machines.

Most elements of the settlement are due to expire in November, but some provisions have been extended for another two years.

The attorneys general of six states and the District of Columbia said Microsoft will again use its market dominance to crush competitors when the court-imposed remedies expire.

The remedies negotiated by the Department of Justice, and imposed by the court, have had little or no discernible success in restoring a competitive marketplace, Connecticut Attorney General Richard Blumenthal said in a press release.

Redmond, Washington-based Microsoft said that it would continue to live up to the settlement.

The consent decree shaped how we view our responsibilities and led us to adopt a set of voluntary principles that will continue to apply even after major parts of the U.S. antitrust ruling expire this November, said Brad Smith, Microsoft senior vice president and general counsel, in a statement.

Earlier this year, Microsoft agreed to modify its Windows Vista operating system in response to a complaint that its computer search function put Google Inc and other potential rivals at a disadvantage.

Google, the leader in Web search, asked a federal judge to extend the consent decree in order to make sure consumers had a truly unbiased choice of desktop search products.

Shares of Microsoft closed down 14 cents at $28.45 on the Nasdaq.

(Reporting by Dai Wakabayashi and Diane Bartz in Washington)

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