John, So far the news from the settlement talks is not negative. The anti-trust lawyer's (not a government lawyer) comments suggest ongoing talks. Here is the lastest updated Bloomberg story i have seen. We probably won't know for sure until tomorrow. I think the 3rd paragraph is the addition to the story.
quote.bloomberg.com;
Microsoft, Antitrust Enforcers End Talks for the Day (Update3)
Microsoft, Antitrust Enforcers End Talks for the Day (Update3) (Adds outside comments, adds details about who attended meeting.)
Washington, March 30 (Bloomberg) -- Microsoft Corp. and government antitrust enforcers met for two hours today to discuss the software giant's proposal to settle charges it used illegal tactics to protect its Windows monopoly in the market for computer operating systems.
Microsoft's representatives, led by General Counsel William Neukom, left the U.S. Justice Department shortly after 7 p.m. without talking to reporters, driving away in a blue Lincoln. Justice Department spokeswoman Gina Talamona declined to comment on the session or say if another meeting was scheduled.
While government officials have expressed skepticism that any settlement could be reached, silence from federal and state antitrust enforcers, as well as Microsoft, could be interpreted as a sign both sides are committed to continuing with settlement discussions, legal experts said. ''It's a work in progress,'' said Los Angeles antitrust attorney Eliot Disner. ''They don't want a single word out there that upsets the apple cart, and that's what's going on here.''
There are incentives for the government and Microsoft to settle the case before the trial is scheduled to resume in May. An out-of-court agreement would let the company avoid further legal distractions, while the government would secure immediate curbs on Microsoft business tactics it has decried as anti- competitive.
Still, both sides have been far apart on what it would take to settle the case. Microsoft's initial overture, a four-page proposal hand-delivered last Monday, was immediately deemed inadequate by state officials because it didn't offer much more than what antitrust enforcers rejected last May before the five- month trial took place. ''More likely than not, there will not be a settlement, principally because the kinds of concessions the state governments and the Department of Justice are likely to insist on as conditions for a settlement will simply be too onerous for the company,'' said William Kovacic, a former government antitrust enforcer who teaches at George Washington University School of Law.
Two-Hour Talk
Justice Department antitrust chief Joel Klein took part in at least part of today's negotiations, which were in the conference room adjacent to his office. Also representing the government were Iowa Attorney General Tom Miller, Connecticut Attorney General Richard Blumenthal, and Stephen Houck, New York's lead litigator in the case. The government's chief prosecutor in the case, David Boies, also entered the building shortly before the meeting began.
On Microsoft's behalf, Neukom was accompanied by former Justice Department antitrust chief Charles ''Rick'' Rule, who has been advising the company on its legal strategy, and one of Microsoft's outside attorneys, Richard Urowsky. Neukom and Urowsky also served as lead negotiators in talks last May intended to head off the lawsuit.
Talks could continue while the trial is in recess until May. That break was called in late February to accommodate the schedule of U.S. District Judge Thomas Penfield Jackson, who told attorneys to use the time off to explore ways to reach a settlement.
Investors have cheered news of the settlement talks. They have sent Microsoft shares up nearly 8.7 percent from the closing price on March 24, the day before New Mexico Attorney General Patricia Madrid told reporters talks were scheduled to take place. Today, Microsoft shares, which split 2-for-1 on Monday, were up 5/8 to 93.
The Proposal
The proposal made by Microsoft included an offer to relax contracts that restrict how Internet service providers and computer manufacturers promote rival products and display Windows, which runs more than 90 percent of the world's personal computers.
The government accuses Microsoft of giving price discounts to companies that comply with its demands not to promote products like Netscape Communications Corp.'s Navigator Web browser. The company hasn't proposed giving computer makers equal access to its pricing information, a concession government officials have said would help prevent Microsoft from favoring some companies over others.
Both sides also remain far apart on a key claim in the government's case: That Microsoft's integration of its Internet Explorer Web browser into the Windows 98 operating system was designed to squash competition from rivals such as Netscape, which has been acquired by America Online Inc.
Microsoft Chairman Bill Gates says his company will not give up its right to innovate its products, a statement interpreted by antitrust enforcers to mean he is unwilling alter Windows to settle the case.
Settlement Advantages
A settlement of the government's lawsuit would allow Microsoft to focus solely on its business plans and give the Justice Department a chance to quickly implement some remedies to curb behavior it has called anti-competitive, experts say. Without a settlement the case could take years to advance through appeals courts. ''A settlement's primary virtue is certainty,'' said Daniel Wall, a San Francisco antitrust attorney and former Justice Department official.
An out-of-court settlement also would enable the government to avoid the risk that a federal appeals court might overturn any remedies imposed by Jackson.
Last year, a federal appeals court reversed an injunction that Jackson had imposed in an earlier Microsoft case, warning that courts should not get into the business of designing products.
That appeals court decision should factor into the Justice Department's thinking, even though the government's lead litigator, Boies, has presented a strong case at trial. Experts say, for instance that the government has presented persuasive evidence that Microsoft used near-exclusive contracts to prevent Netscape from distributing its browser. ''If DOJ thinks what they are being offered by Microsoft is something that is not something at risk in the Court of Appeals, there is very little reason for them to settle,'' Washington antitrust attorney Marc Schildkraut said.
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