Microsoft Drafts Settlement Proposal, Hoping to Resolve Antitrust Lawsuit
September 10, 2001 2:05 AM
WASHINGTON -- Microsoft Corp. is drafting a settlement proposal for a new round of talks with the government this week, aimed at resolving the landmark antitrust suit against it, lawyers close to the case told The Wall Street Journal.
The overture comes in response to the government's decision last week to narrow legal issues in the case and not seek a breakup. It will be Microsoft's (MSFT) first substantive effort to settle since a June 28 ruling by the federal appeals court here that upheld the core of the government's case. Settlement efforts have failed and the government is continuing to draft a broad set of restrictions on Microsoft's business conduct that it will ask a federal court to impose. These rules are intended to take the place of a breakup, a remedy that was thrown out by the appeals court in June and formally abandoned last week by the Justice Department and 18 states involved in the case.
The proposed restrictions will be the subject of hearings here this fall before U.S. District Judge Colleen Kollar-Kotelly, who has asked for briefs from both sides by Friday and an initial hearing on Sept. 21. The government will seek rules that allow computer makers to choose among rival software products rather than being forced to take what Microsoft demands when it licenses its widely popular Windows operating system software, among other provisions, those close to the case said.
Software features or programs will be covered under the government's approach if they are seen as potential threats to Windows, these lawyers said. This category of products is almost certain to include Internet browser software and Sun Microsystems Inc.'s Java software, which were both cited by the court as having been targeted by Microsoft, along with other current and future technology that may threaten the Windows monopoly.
Examples of non-Microsoft products that PC makers would be free to adopt could also include multimedia software plug-ins and instant-messaging software, among other technologies, though these definitions are still being worked out, the lawyers said.
Microsoft is expected to fight the restrictions now under development. Last year, its chief executive, Steve Ballmer, called proposed conduct rules "just as damaging" as a breakup and said that they would force the company into court-ordered regulation.
Details of Microsoft's settlement proposal couldn't be confirmed. In a prior effort to settle two years ago, Microsoft's proposal offered to end a number of contract and licensing provisions, to provide for more disclosure about the inner workings of Microsoft's products to software developers and others and to more fully open the Windows "desktop" or first screen. The government rejected these provisions as inadequate to restore competition.
A spokesman for the Redmond, Wash., software maker declined to comment.
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