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Microsoft to settle too?
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March 9, 1999: 6:11 p.m. ET
Report says software maker exploring deal with Feds, but U.S. sources say no
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NEW YORK (CNNfn) - Microsoft is exploring a settlement of the government's landmark antitrust case against the software giant, the Seattle Times reported Tuesday, a day after Intel announced an unexpected settlement in its antitrust case.
Shares of Microsoft (MSFT) rose on the speculation, closing at 2-13/16, up 161-13/16 points in Nasdaq trading.
Later in the day, Reuters reported that a government source said there have been "no discussions," and if Microsoft were to make an offer, "the government is generally skeptical it would be a serious offer."
For its part, Microsoft called the report "speculative" and declined comment whether it is in talks about a potential settlement.
Quoting people close to the case, the newspaper said Microsoft and the government are trying to settle before the case resumes next month after a six-week recess.
"It makes sense to explore settlement discussions," the newspaper quoted a source close to the case as saying. It didn't say if the two sides are talking but said sources indicated that preliminary discussions "could occur."
The report said nothing is expected until next week, when some lawyers in the case return from vacation.
"These reports are speculative," Microsoft spokesman Greg Shaw said, referring to the Seattle Times story and other recent accounts of a possible settlement in the case.
"We have said since before the case was filed that we're willing to listen to the government but there are some very important principles at stake in the case that have not been negotiable," Shaw said, noting Microsoft's long-standing position that it should be able to develop products as it wishes.
In their case, the Justice Department and 19 states allege Microsoft (MSFT) abused its monopoly in computer-operating systems to block competition from Netscape (NSCP) and other companies. Prosecutors argued, for example, that Microsoft tied its Internet browser, Explorer, to its Windows operating system, making it harder for Netscape's rival Navigator browser to compete, since Windows is installed on 85 to 90 percent of all personal computers.
Microsoft says its actions, while aggressive, were allowed under federal law.
After Intel's announcement Monday, some industry analysts said it moved to settle after learning a lesson in the Microsoft case: It doesn't pay to fight the government.
If the Seattle Times report is correct, it may mean that Microsoft now has learned a lesson in turn from Intel. But Microsoft's Shaw said the proposed Intel settlement has not changed Microsoft's thinking in its case.
The pressure on Microsoft to settle has grown as the date for a ruling in the government's case approaches. If Microsoft loses, prosecutors could try to break up the software giant, force it to license the computer codes for Windows or take other steps.
While some industry experts say the government's lawyers outdueled Microsoft's attorneys in court, Shaw said the government "failed to prove its case" or any harm to consumers.
Microsoft stock rose 4-3/8 to 163-3/8 at midday Tuesday on Nasdaq. 
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