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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (25014)	6/27/1999 2:42:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 74651

Experts see no Microsoft antitrust settlement soon Reuters Story - June 27, 1999 09:39 By David Lawsky WASHINGTON, June 27 (Reuters) - After months of trial that exposed Microsoft Corp.'s bullying business practices and cast doubt on the credibility of chairman Bill Gates, the U.S. government is unlikely to settle the case unless the software giant makes major concessions, experts say. The government has little incentive to compromise because most experts believe District Judge Thomas Penfield Jackson will rule against the software giant. "There's no question the government has made a case and I would be very surprised if Judge Jackson didn't come down with a finding to that effect," said Thomas Morgan, who teaches antitrust law at Brigham Young University in Provo, Utah. Another antitrust lawyer said it is too soon for either side to settle. "Right now, hope springs eternal for both sides," said Kevin Arquit, an antitrust lawyer for Rogers and Wells in New York. "Microsoft and the government are starting from different ends." The Justice Department and 19 states allege that Microsoft leveraged monopoly power derived from its Windows operating system by bundling its Web browser to hurt a competing product made by Netscape Communications. But Gates said the integration of Internet Explorer into Windows was a "fantastic thing" that made the product better. "I'm surprised we have to defend it at all," he said in Washington this month. Although he never appeared in person at the trial, Gates was a key figure. On the trial's first day, last Oct. 19, a government lawyer showed direct contradictions between the chairman's videotaped testimony and memos he had written to other executives. Judge Jackson shook his head in amazement and smiled -- while the courtroom audience laughed out loud -- at some of the more tortured exchanges between an evasive Gates and government lawyer David Boies in tape excerpts played over several weeks. Boies held out an olive branch to Microsoft on the courthouse steps soon after trial testimony ended last Thursday, giving a nod to Microsoft's lawyers. "We fight in court sometimes but more than that we cooperate in court," said Boies. If a settlement is possible, he said, "nothing that happened in court will get in the way of that." But what happened out of court a day later did get in the way of settlement. The Justice Department bristled at a news report on Friday that suggested the two sides were negotiating. A spokeswoman blamed Microsoft for violating a March pact to keep such talks a secret. "Microsoft's repeated disclosures to the press to spin its position in settlement are a significant obstacle to making progress," said Justice Department spokeswoman Gina Talamona. Microsoft responded in kind with a statement that appeared to blame the Justice Department for the leak, which included an outline of Microsoft's proposals. The tiff left unclear what would be needed to settle the case. Some experts believe any settlement that the government would agree to would have to stop Microsoft from using monopoly power to crush future competitive threats. Arquit said a preliminary judicial decision expected in September or October, known as "findings of fact," may help spur new talks. The findings will point the way to Jackson's later decisions in the case. Jackson will sift through the evidence -- including the testimony of 26 witnesses and several thousand exhibits such as e-mails, expert reports and videotaped demonstrations -- and then say in writing what he believes is the truth. "When the judge issues his findings of fact, like it or not, that will create a benchmark from which discussions can flow," said Arquit. Some critics of Microsoft wonder if Jackson may follow the example of District Judge Harold Green, who used a routine decision to send an unmistakable message to AT&T in its landmark antitrust case. "The Bell system has violated the antitrust laws in a number of ways over a lengthy period of time," wrote Greene in his Sept. 11, 1981, ruling, warning that from then on "the burden is on the defendants." His strong words led directly to AT&T's voluntary decision to break up on Jan. 1, 1984.