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Microsoft pushed to settle
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November 23, 1999: 12:57 p.m. ET
In appointing a mediator, judge told both sides the time is right to settle
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NEW YORK (CNNfn) - A federal judge told Microsoft Corp. and government attorneys that the time was right to settle their historic antitrust case, according to newly disclosed transcripts.
"I think this is probably as propitious a time for any possible negotiated outcome as you could have," Judge Thomas Penfield Jackson told lawyers for Microsoft (MSFT), the Justice Department and 19 states during a meeting in his chambers last Thursday.
Saying that he had "something of a surprise," he told the group that he wanted to name Richard Posner, an appeals court judge, as mediator in the case -- a move that was announced Friday.
Jackson also asked whether Posner's efforts should proceed "clandestinely," then decided against it.
The judge said his decision to recommend a mediator was "partly motivated" by reports in the press that the Justice Department and the states might seek different remedies if Microsoft loses the case, one of the biggest antitrust trials of the century.
"The harmony between the states and the DOJ so far has been, I think, enormously helpful, and I would like to see that continue," Jackson said. "I would not like to have to deal with divergent points of view."
After Jackson disclosed his findings of fact earlier this month, some state attorneys general said they would seek harsh remedies against Microsoft should the judge rule the company violated antitrust laws. Meanwhile, Joel Klein, head of the Justice Department's antitrust division, has said the government will consider all possible remedies.
But Richard Blumenthal, Connecticut attorney general, told Jackson during the meeting that "reports of divergent views were somewhat exaggerated."
The disclosure comes one day after private lawyers filed a class-action lawsuit against Microsoft, claiming it violated California law by using its monopoly power to overcharge for its Windows operating system.
Because of the threat of other such actions, antitrust experts say Microsoft would benefit greatly from a settlement. Jackson found as a matter of fact that Microsoft held monopoly power in the PC operating systems market.
In an unusual move, Jackson separated his findings of fact from his conclusions of law. Unlike conclusions of law, findings of fact are not usually considered admissible as evidence in private suits. That means if Microsoft and the government reach a settlement, private parties seeking to sue Microsoft would have to go through the difficult process of proving its monopoly position.
The Justice Department and 19 states sued Microsoft in May 1998 for broad antitrust violations.
Microsoft shares climbed 11/16 to 90-1/2 in early afternoon trade.
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