To All: Interesting times indeed.
Microsoft, Justice Remain Far Apart
_____ U.S. v. Microsoft _____
Special Report
By James V. Grimaldi
Washington Post Staff Writer
Saturday, March 25, 2000; Page E01
Government lawyers yesterday reviewed Microsoft's last-ditch proposal to settle its antitrust case, but sources close to the matter said the two sides remain sharply divided with a dwindling chance of agreement before the Tuesday deadline set by a federal judge.
U.S. District Judge Thomas Penfield Jackson told the attorneys last week that if they don't make progress in the talks, he plans to issue his final ruling Tuesday determining whether Microsoft Corp. broke federal antitrust laws, the sources said.
Jackson already has issued findings of fact stating that Microsoft used its monopoly to harm competitors, stymie innovation and hurt consumers. The findings were so forceful against Microsoft that most observers expect the judge's final ruling to go against the company, setting the stage for "remedy" hearings to come up with sanctions that correct the harm done to the computer marketplace.
Spokesmen for the Department of Justice and Microsoft declined to comment yesterday.
The Justice Department, and the 19 states that have joined the case, have agreed to talk about a possible settlement that would keep the software giant intact, avoiding a breakup that has been strongly opposed by Microsoft.
In recent weeks, mediator Richard Posner, an appellate judge in Chicago, has consistently peppered both sides with faxes, e-mails and phone calls about proposals and counterproposals. The parties have not dealt face to face, but instead have been working through Posner, who has been acting in the role of an electronic shuttle diplomat. The work has brought the parties within reach of a breakthrough, sources said.
Still, gauging the sincerity of the latest round of proposals has been difficult for both sides of the case because each fears the other might be trying to position itself for a public relations battle over who to blame should the settlement talks fail.
After government attorneys agreed that they could consider a settlement that did not result in the breakup of Microsoft, they broadly outlined what issues raised in the judge's findings of fact would need to be addressed by enforced changes in the company's business practices.
Ideas that have arisen include unbundling software applications such as the Internet Explorer browser from the Windows operating system and offering computer makers choices about what software they wanted installed on their products.
Another proposal would require Microsoft to promise computer makers a predictable, nondiscriminatory price for Windows, so the company could not use its monopoly to punish companies that don't follow its will.
Under such a plan, the computer makers also could be permitted flexibility about how they configure the Windows desktop so that potentially competitive software products could be given a chance among computer users.
While discussions through Posner have been proceeding since the Feb. 22 closing arguements, they were not thought to be close to a breakthrough until this week when Jackson put time pressure on both sides.
A looming matter of concern for Microsoft and stockholders has been the threat of follow-on lawsuits. If the judge issues a final ruling against the company, the private attorneys could use it in their own lawsuits. The other danger for Microsoft: Private antitrust actions can seek triple damages.
A settlement "avoids a judgment on the merits, which is a precedent out there for any other court, and there is some possibility it could be used as a sword against Microsoft," said Mark Popofsky, a former Justice Department attorney who worked on the Microsoft case and is now in private practice.
But Microsoft has indicated it is prepared to battle those lawsuits. It would likely challenge the right to use Jackson's ruling in the follow-on lawsuits until the company has exhausted its appeals process. Such an argument might have weight because the precedents are mixed on that point, Popofsky said.
Microsoft shares dropped slightly yesterday to $111.68ó after leaping 8.4 percent on Thursday on news the settlement talks were progressing.
¸ 2000 The Washington Post Company |
