"It's a slow retreat for Microsoft to fall into a middle ground with the government," said George Koo, an analyst with Burnham Securities in New York. "They are backing down." All of these deals were part of Microsoft's aggressive plan to promote Internet Explorer and take market share from Netscape Communications' Navigator, still the dominant Web browser but rapidly losing ground. The Justice Department has accused Microsoft of unfairly leveraging its Windows operating system dominance to foist its browser on business partners, and Hatch called Tuesday's Senate Judiciary Committee hearing to address concerns arising from the case. Industry analysts and legal experts say the company's recent retreat from some of its contracts appears to be aimed at heading off any government regulation. In a worst-case scenario for Microsoft, the company could eventually be ordered to break up parts of its business, not unlike the divestiture of AT&T more than a decade ago.