While the talks could still collapse over specific terms, The Wall Street Journal reported, the gulf between the two sides is narrowing, and the outlines of an agreement may be within reach. If approved by the court, a settlement would end the landmark federal antitrust case and impose tough restrictions on the company's conduct.
The effort gained new urgency this week after the trial judge, Thomas Penfield Jackson, summoned lawyers for Microsoft, Justice Department and 19 states to his chambers Tuesday, the report said. While participants in the meeting wouldn't disclose what was said, the Journal reported that people close to the case said the judge made it clear that there was little time left before he issued a final judgment.
Jackson has appointed appellate judge Richard Posner to arbitrate the voluntary settlement talks even as Jackson prepares a final ruling in the case, which was filed 22 months ago. Jackson has already ruled that Microsoft in fact possesses a monopoly in its Windows operating systems and that its monopoly has hurt competition.
The judge is expected to rule within weeks whether Microsoft's conduct has violated the Sherman Anti-Trust Act.
The government is thought to favor some kind of break-up or restructuring of the software giant, perhaps by putting the operating systems into one company and everything else into another.
Other possible alternatives include the so-called Baby Bills option, which would give several Microsoft spin-offs a license to sell Windows, thus creating instant competition in personal computer operating systems. The government would like to avoid a lengthy regulatory-type relationship with the company that might be necessary if the final disposition of the case were to center around carefully worded proscriptions of conduct.
The Washington Post noted that the flurry of discussions between the parties could be part of a public relations battle by each side so as to not be seen as the intransigent one. Microsoft would like to avoid an unfavorable ruling, which could provide ammunition in dozens of private anti-trust suits it is fighting.
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