April 1, 2000
Judge Posner Ends His Effort
To Mediate Microsoft Dispute
Associated Press
CHICAGO -- Talks between the federal government and Microsoft broke
down Saturday as a judge here trying to mediate a settlement in the
antitrust lawsuit against the software giant said he was ending his effort.
Last week, the judge hearing the case in
Washington postponed his ruling to give the
two sides more time to talk.
Federal appeals court Judge Richard Posner said that since accepting the
task, he had tried to find a common ground that might enable the two sides
to settle their differences.
"After more than four months, it is apparent that the disagreements among
the parties concerning the likely course, outcome, and consequences of
continued litigation, as well as the implications and ramifications of
alternative terms of settlement, are too deep-seated to be bridged," Judge
Posner said in a statement.
Judge Posner said he won't make any comment on the merits of the
litigation, or on the negotiating positions of the parties involved.
Microsoft Chairman Bill Gates was "disappointed" talks had stopped,
company spokesman Greg Shaw said.
"Gates said that they devoted over 3,000 hours all told to the effort over
the past four months and that Microsoft offered significant concessions,"
Mr. Shaw said.
In Washington, Joel I. Klein, the assistant attorney general in charge of the
Justice Department antitrust division, said in a statement: "We would have
preferred an effective settlement to continued litigation. But settlement for
settlement's sake would be pointless."
Mr. Klein said if the ruling goes against Microsoft, the Justice Department
"will seek a remedy that prevents Microsoft from using its monopoly in the
future to stifle competition."
At issue is a lawsuit filed by the federal government and 19 states alleging
that Microsoft repeatedly engaged in illegal anti-competitive behavior by
using monopoly power.
U.S. District Judge Thomas Penfield Jackson in Washington, D.C., agreed
with nearly all the allegations in an initial findings in November. He said the
company's aggressive use of its monopoly status stifled innovation and hurt
consumers by limiting choices.
On Tuesday, Judge Jackson postponed his verdict in the case to give both
sides more time to hammer out details of a possible out-of-court
settlement.
Judge Jackson has encouraged the parties to make a deal, attorneys have
said.
Both sides have reason to reach a settlement. For Microsoft, a harsh ruling
could be used against the company in dozens of class-action lawsuits its
faces from both rivals and clients.
The government, meanwhile, would have a long wait before the company
is forced to change its behavior. Once Judge Jackson issues a verdict, he
would have to hold additional hearings to determine what kind of sanctions
to impose. Microsoft would likely appeal any decision, possibly tying up
the case for several years in a court that could ultimately overturn parts, if
not all, of the initial judgment.
Judge Jackson had warned lawyers that he would announce his final ruling
as early as Tuesday if they failed to make significant progress toward
reaching a settlement.
A recording at the federal courthouse Saturday confirmed the verdict
would not be issued Tuesday but offered no additional information.
Microsoft officials -- including Mr. Gates -- negotiated with government
attorneys just days before the Justice Department filed its original
complaint in 1998. An agreement appeared likely until government lawyers
complained that Mr. Gates reconsidered details in an offer he made. The
deal fell through, and the government filed suit.
Once Judge Jackson issues a verdict, he would have to hold additional
hearings to determine what kind of sanctions to impose.
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