Judge in Microsoft case gives more time

By Keith Perine
The Industry Standard, 03/28/00

WASHINGTON - The federal judge in the government's antitrust case against Microsoft (MSFT) has decided to give the two sides more time to hash out an out-of-court settlement.

A spokesperson for Judge Thomas Penfield Jackson said the judge will not hand down his "conclusions of law" Tuesday, as widely expected. Jackson set Tuesday's deadline on March 21, when he called the attorneys into his chambers and bluntly told them that time for a settlement was running out.

If Jackson's earlier "findings of fact" in the case are any indication, his final ruling - if delivered - will find Microsoft guilty of multiple violations of the Sherman Antitrust Act.

Throughout the case, however, Judge Jackson has contorted himself in an attempt to coax both sides to settle. In November, Jackson appointed Chicago appellate Judge Richard Posner to mediate talks. But neither side seemed to take those talks seriously until last week.

On Friday morning, Posner sent Microsoft's latest offer to the government. It included an astonishing concession - a new willingness by the software giant to allow computer and software-makers to modify the source code for Microsoft's dominant Windows operating system. Other provisions included Microsoft promises to separate the Internet Explorer Web browser from Windows and to stop discriminating by charging different PC makers different amounts for Windows.

Microsoft's offer wasn't enough for the government, which remains deeply distrustful of the company. The Justice Department is haunted by a 1995 consent decree that left Microsoft enough latitude to weld Internet Explorer onto Windows. The combination of IE with Windows led the federal government, 20 states (one has since dropped out) and the District of Columbia to bring this lawsuit in May 1998.

But the current offer was at least good enough to start the negotiations in earnest. Jackson apparently has delayed his ruling because he's optimistic that the sides will soon agree to a settlement.

Talks continue via telephone, e-mail and fax. Sources close to the case say the sides would not be able to agree to any settlement without a face-to-face meeting with Posner. Sources also say junior officials from both sides are standing by in Chicago.

The wild card in negotiations is the group of 19 state attorneys general and the District of Columbia corporation counsel. Any agreement reached between Microsoft and the Justice Department would be useless unless the states and the District were to sign off on it, as well. Reports indicate that some states are still pushing for the company to be broken up.

It's unclear how long Jackson will give the two sides to hash out a deal. But a prolonged impasse, even one between the Justice Department and its partners in the case, is likely to trigger his ruling.