WASHINGTON, Mar 25, 2000 (AP Online via COMTEX) -- Skeptical government
lawyers consider an 11th-hour offer from the Microsoft Corp. to settle
its antitrust trial so inadequate in important areas that there were no
immediate plans to resume negotiations in Chicago, people close to the
case said Saturday.
These sources did not rule out the possibility of talks resuming, and
the government continued to evaluate the proposal by Microsoft to end
the case before Tuesday, when the trial judge has threatened to
announce his verdict.
U.S. District Judge Thomas Penfield Jackson, who has hinted he will
rule strongly against Microsoft, has told lawyers in a private meeting
that he will deliver his ruling that day unless there is progress in
settlement talks being organized by U.S. Circuit Judge Richard Posner
in Chicago.
The government on Saturday again reviewed Microsoft's latest offer,
which published reports said included promises to separate the
company's Internet browser software from its dominant Windows operating
system. The proposal, faxed on Friday, was sufficiently complex that
some of the Justice Department's top technical experts were evaluating
it.
But there were new signs suggesting no deal would be struck
successfully before Jackson's deadline.
Lawyers on all sides had no immediate plans to fly to Chicago for
lengthy negotiations, and Microsoft already is considering its
witnesses for the next stage of the trial -- after the verdict when
Jackson decides the company's punishment.
'I was pessimistic a while back, and I remain skeptical,' said Robert
Litan, a former senior Justice official who negotiated with Microsoft
in an all-night session in a related 1994 case.
The Justice Department has backed off proposals to break up Microsoft
to restrain what the judge has characterized as the company's abuse of
its monopoly power over the technology industry.
But it was expected to demand some limits on what features Microsoft
can add to Windows, out of fear the company could overwhelm smaller
rivals offering some fledgling technology that threatens Microsoft's
lucrative flagship Windows software.
'If they're going to be hung up on anything, it will be that tying
issue,' Litan said. 'If Justice is insisting on some sort of future
judicial determination whether a new (Windows) product includes an
unlawful tie, I can't see Microsoft going for that.'
The government also is restrained in seeking a negotiated settlement by
expectations of a favorable ruling from Jackson. He issued the first
phase of his verdict in November with blistering findings that accepted
nearly all the allegations against Microsoft.
In the upcoming phase, Jackson must identify which federal laws, if
any, Microsoft violated.
'The plaintiffs are a bit of a prisoner of exaggerated expectations
that the process to date has created,' agreed William Kovacic, an
antitrust expert at George Washington University who has closely
followed the trial.
Kovacic said Assistant Attorney General Joel I. Klein would 'have to
stand in front of a sea of microphones and cameras and explain why this
solution provides suitable value for the litigation position he had
acquired. He's going to have to tell people why he compromised his
claim in return for this result, and I can assure you there will be
many skeptics.'
Litan said the Justice Department, if it were to agree to lenient terms
for Microsoft, 'would be susceptible to the charge of winning the
battle and losing the war.'
The government's negotiating position also is tainted by its past
experiences. Microsoft Chairman Bill Gates, who played chess on some of
the earliest computers in middle-school, was thinking moves ahead of
government lawyers in a previous court fight years ago.
Microsoft proposed agreeing to never require Windows customers to also
buy any of its other products. But the company's lawyers also
considered adding a provision that Microsoft would never be blocked
from 'developing integrated products which offer technological
advantages.'
Gates bristled after reviewing a draft the night before negotiations
resumed. He ordered his lawyers to remove the last four words, a subtle
change that would return to haunt the government.
Justice accepted the provision as part of its 1995 consent decree, and
Microsoft later claimed the language allowed it to bundle its Internet
software into its Windows operating system -- a core complaint in the
government's current antitrust case.
Litan said such loaded clauses are 'all they're going to be looking
for' in the government's current review of Microsoft's offer. 'They
don't want to get snookered.'
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