(adds Wind River statement, closing share price)
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.
Government antitrust enforcers charge that a February 2001 agreement between the two companies ended over a decade of competition in software used to design computerized control systems like anti-lock brake systems and aircraft flight controls.
Under that pact, MathWorks gained the exclusive right to sell and support Wind River's MATRIXx software. MathWorks, which offers its own software called Simulink, also received an option to buy the Wind River product after 2-1/2 years.
The Justice Department complained that MathWorks gained control over the pricing, marketing and future development of MATRIXx, which Wind River ceased improving.
Under the proposed settlement, Alameda, California-based Wind River would agree to sell its MATRIXx business if the Justice Department gets an order requiring divestiture and will cooperate in developing the government's case.
MathWorks declined to comment on the suit. Wind River said it will comply with whatever results from the government's action.
Shares of Wind River closed down nine cents, or 1.7 percent, to $5.78 in Nasdaq trading on Friday after briefly dipping as low as $5.44 versus a 52-week high of $22.15.
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.
James said the 2001 deal between MathWorks and Wind River eliminated "important competition that has driven significant technical improvements and price reductions for consumers, including major aerospace and automotive companies, engineering firms, and governmental entities."