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WASHINGTON, June 21 (Reuters) - The U.S. Justice Department went to court on Friday to restore competition in the market for specialized industrial design software, settling with Wind River Systems Inc. but still pursuing The MathWorks Inc.
The government alleges the two companies reached an agreement not to compete with each other in February 2001, giving The MathWorks the exclusive right to sell Wind River's software -- used to design computerized control systems like anti-lock brake systems in cars or aircraft flight controls.
As part of the non-compete agreement, Wind River stopped its own development and marketing, the Justice Department alleges.
Under the proposed settlement, Alameda, California-based Wind River would sell its MATRIXx business and cooperate in the government's case.
The government said Wind River remains a defendant in the suit, filed in U.S. District Court in Alexandria, Virginia, for the sole purpose of trying to obtain a judgment against MathWorks, a privately held company based in Natick, Massachusetts.
Justice Department Antitrust Division chief Charles James said high-technology products like the software at issue in the case, worked behind the scenes to help build some the U.S. economy's most sophisticated products.
"This (non-compete) agreement eliminates important competition that has driven significant technical improvements and price reductions for consumers, including major aerospace and automotive companies, engineering firms, and governmental entities," James said in a statement.
The MathWorks and Wind River had no immediate comment on the Justice Department announcement.
Shares of Wind River fell 34 cents, or 5.8 percent, to $5.54 in early-afternoon Nasdaq trading.