Perhaps its due to this front page article in wsj this morning.
March 23, 2000
Microsoft, U.S. Talks Pick Up Pace;
An End to Antitrust Case Is Possible
By JOHN R. WILKE
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- Settlement talks between Microsoft Corp. and the
government quickened this week, and some participants now believe a deal
may be possible, people close to the effort said.
These people said that while the talks could still
collapse over specific terms, the gulf between
the two sides is narrowing, and the outlines of
an agreement may be within reach. If approved
by the court, a settlement would end the
landmark federal antitrust case and impose tough restrictions on the
company's conduct, they said.
The effort gained new urgency this week after the trial judge, Thomas
Penfield Jackson, summoned lawyers for Microsoft, the Justice Department
and 19 states to his chambers Tuesday. While participants in the meeting
wouldn't disclose what was said, others close to the case said the judge
made it clear that there was little time left.
Judge Jackson is expected to issue a final ruling shortly on whether
Microsoft violated antitrust law. In a preliminary ruling Nov. 5, he found that
Microsoft wielded monopoly power and had stifled competition and
innovation to protect its Windows software and extend that dominance to the
Internet. The company disagreed with the judge's findings and has said that
it is likely to appeal if it loses.
Judge Posner Mediating
But Judge Jackson has pushed both sides to settle the case and set in motion
the current settlement effort by asking Richard Posner, chief judge of the
federal appeals court in Chicago, to serve as mediator in the effort.
Participants credited Judge Posner's persistence and persuasion for the
improved settlement prospects. Others close to the case also said a private
meeting in mid-January between Judge Posner and Microsoft Chairman Bill
Gates helped the effort.
The settlement push is now focused on developing tough restrictions on
Microsoft's conduct, not on a restructuring or breakup, the people close to
the case said. The restrictions would be aimed at preventing Microsoft from
using its market power over personal-computer makers and software and
Internet companies.
Such an agreement, if it flies, would represent
significant movement by both sides. The
government entered the talks deeply mistrustful of
Microsoft and skeptical that the software company
would respect the terms of any conduct-based
settlement. Microsoft, for its part, rejected a
structural settlement and initially rebuffed any limits
on its conduct.
But as a Jackson verdict approaches, Microsoft has
signaled that it is ready to accept a more
far-reaching conduct settlement -- and is prepared
to offer more concessions. A pact would likely
include provisions that prohibit discriminatory pricing
among personal-computer makers -- that is, rewarding a few PC makers
with favorable Windows prices or terms -- and give them greater freedom to
sell rival software on new computers. And a settlement would include
measures requiring greater disclosure of the inner workings of Windows, the
so-called application-programming interfaces, to protect rival software
makers.
No Direct Meetings
Any conduct settlement would also have to address the issue of tying a
competitive software product to one that already dominates its market, such
as Windows; in the trial, Microsoft was alleged to have tied its
Internet-browser software to Windows to crush a rival. The chances of a
settlement could turn in part on whether either side gives ground on this
issue, or leaves some room for the other to save face.
In the mediation, the parties haven't been meeting directly with one another,
though they may do so in the next few days. Until now, they have been
working largely in the dark, with Judge Posner in the middle controlling all
aspects of the discussions, people close to the talks said. Indeed, despite
intense public interest and the far-reaching impact of any settlement, Judge
Posner has demanded total secrecy and threatened sanctions if any party
speaks publicly.
As a result, both sides have been extraordinarily cautious about commenting
on the case in recent weeks. A Microsoft spokesman declined to comment
Wednesday night. A Justice Department spokeswoman said only that
"whoever is making these kinds of statements is just engaged in a
public-relations effort that should not be taken seriously."
Indeed, some in the government camp suspect any new overtures by
Microsoft could be intended to position the company to appear reasonable if
the talks ultimately fail. In the Microsoft ranks, some have argued that the
government is asking for too much, Judge Jackson has already made up his
mind, and the company should simply look ahead to the possibility of a more
favorable reception in the appeals court. That would mean the case would
drag on for another year or more -- allowing Microsoft to gain an even
stronger position in the market.
Talks Continue
On Capitol Hill Wednesday, Joel Klein, the Justice Department's antitrust
chief, told a Senate panel that any remedy or settlement must be
"commensurate with" the company's "serious pattern of anticompetitive
conduct."
Mr. Klein wouldn't discuss the status of the talks but said they were
continuing. However, he said that while settlement is preferable to litigation,
any settlement must address the Justice Department's concerns.
Judge Jackson hasn't said when he will rule, but people involved in the case
note that he ruled quickly on the findings of fact late last year, and they now
expect that unless a settlement is reached, he will rule on his conclusions of
law within weeks. At the courthouse here, a telephone message offering
updates on the trial was changed Wednesday, directing callers to a court
Web site to view the ruling when it is issued.
Write to John C. Wilke at john.wilke@wsj.com |
