From the WSJ:
February 16, 2000
Microsoft Rejects a Breakup,
May Agree to Some Restrictions
By JOHN R. WILKE
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- Microsoft Corp. told lawmakers that any breakup of
the software concern would amount to a "regulatory death sentence," but
signaled that it would accept some "common sense" restrictions on its
conduct to settle the government's antitrust claims.
Microsoft previously argued that it isn't a
monopoly and shouldn't be subject to any
restrictions on its conduct. But it is changing its
tone as settlement talks continue in Chicago
and both sides prepare to return to federal court here for closing arguments
next week.
"Microsoft is quite seriously trying to settle this case, and we believe a
common-sense settlement should be possible," Microsoft wrote in an
e-mail to congressional offices on Friday. It rejected any breakup as
"extreme and unwarranted ... a regulatory death sentence while the
high-tech economy whizzes by on Internet time."
The settlement effort, shrouded in secrecy since it began in Chicago late
last year, has been mediated by a federal appeals-court judge, Richard
Posner. While a number of proposals remain on the table in that effort,
participants say that without a substantial shift by one side or the other the
talks are unlikely to yield an agreement before the two sides return to court
for the trial's final round.
Preparing Final Arguments
Legal teams on both sides are preparing closing arguments for Judge
Thomas Penfield Jackson scheduled for Feb. 22; that date was expected
to be pushed back if progress was being made in Chicago. Judge Jackson,
who pressed both sides to enter the talks, found Microsoft to be a
predatory monopolist in a preliminary ruling delivered Nov. 5.
There are signs Microsoft's new wave of lobbying here is gaining traction.
House Minority Leader Richard Gephardt (D., Mo.) Tuesday encouraged
both sides to come to terms in the settlement talks. "Negotiation is always
better than litigation," he said in response to an inquiry, adding that any
agreement should "protect innovation while ensuring that the laws are
enforced."
Tom Daschle, the Senate Minority Leader from South Dakota, issued a
similar statement, saying "the current mediation provides both parties a
unique opportunity to resolve this dispute in a way that strikes a balance
between the importance of antitrust law and innovation."
A Justice Department spokeswoman declined comment. In the past,
officials have said they would only accept a settlement that restores
competition to the industry and removes Microsoft's ability to repeat the
antitrust violations alleged at trial. One person in the government camp said
Microsoft was trying to look reasonable without putting anything significant
on the table.
Microsoft has sharply boosted its political contributions since its latest
antitrust problems began two years ago, initially favoring Republicans but
more recently giving to Democrats as well. The Redmond, Wash.,
software maker has built a strong presence in Washington, countering
similar efforts by competitors.
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