Will Gates and Gov't Negotiate?

Microsoft founder Bill Gates could be more willing to negotiate with government lawyers. And the government may just be willing to work something out, as Senators Orrin G. Hatch, R-Utah, and Charles Schumer, D-N.Y., hinted to CBS News Face the Nation Anchor Bob Schieffer. Their talk followed Friday's ruling by a federal judge that declared Microsoft a monopoly.

In 207 pages of findings tilted heavily toward the government's view, U.S. District Judge Thomas Penfield Jackson said Microsoft has "demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products."

Friday's announcement puts new pressure on the software giant to settle the government's antitrust case or face the possibility of a spate of damage lawsuits, experts said.

Yet both Senators urged caution in taking action against the software giant, and acknowledged the positive contributions Microsoft has made to the computing industry.

"If they violated the law, punish them," Schumer told Schieffer. "But be careful, remembering lots of good that Microsoft's done. My kids do their homework a lot better because there's Microsoft."

Hatch doubted that Judge Jackson's decision would prove detrimental to Microsoft in the long run. "Microsoft's a great company. No matter what happens, I think Microsoft will come out of this still being the dominant and strong company or set of companies in the industry," he said, adding "I don't wish Microsoft any harm."

Jackson issued the "findings of fact" ruling after the close of the stock market. Microsoft's stock fell in after-hours trading, and many stock watchers predict that Monday could be a down day on Wall Street for the software giant.

Gates told reporters at a news conference Friday that he and other company executives "respectfully disagree with a number of the court's findings and believe the American legal system will ultimately affirm that Microsoft's actions were fair and legal and have brought tremendous benefits to millions of consumers."

Judge Jackson's findings say Microsoft not only knew what Netscape was doing, but was terrified by its emerging dominance and used hardball business tactics and sabotage to thwart it.

Microsoft's Windows products run most of the world's personal computers, and its Internet Explorer product for navigating on the World Wide Web has eclipsed a once-dominant rival made by Netscape.

Gates insists Microsoft has helped create an industry of literally thousands of companies, and helped make personal computers more affordable and easier to use.

What's The Next Step?

While settlement talks would begin quietly and informally, Attkisson reports that the next official move is for both sides to suggest terms of a final ruling.

"We'll continue to make our best efforts to resolve the case," Gates said. "Getting it behind us would be a very good thing, but we'll continue to stick up for our principles."

Jackson's findings do not necessarily mean the company will lose the case. Federal law generally bans companies from maintaining monopoly power through illegal business practices, but not from achieving their success selling popular products or making shrewd business decisions.

Calling the judge's announcement a "tremendous victory for America's consumers" Assistant Attorney General Joel I. Klein said the federal government was "always prepared to discuss settlements." But he added that "any talks would have to fully and properly address our competitive concerns."

The success of Microsoft, with $19.7 billion in sales this year alone, rarely wavered during the legal assault. Its stock price more than doubled since the lawsuit was filed in May 1998.