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Microsoft to talk settlement
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November 25, 1999: 12:26 p.m. ET
Software giant, government summoned to Chicago Tuesday for settlement talks
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NEW YORK (CNNfn) - Microsoft and the government are being summoned to Chicago Tuesday for the first round of settlement talks following the software company's highly publicized antitrust case, the New York Times reported Thursday.
Lawyers for both sides will convene in the windy city for their first round of discussions under Richard A. Posner, the federal appeals court judge who has been selected as a mediator, the Times said, citing a person close to the antitrust case.
The talks follow U.S. District Judge Thomas Penfield Jackson's appointment of Posner a week ago to handle "voluntary" negotiations between the two sides. Posner, chief judge of the seventh Circuit U.S. Court of Appeals in Chicago, will act as mediator in a private capacity, meaning his involvement is separate from the U.S. District Court's participation in the case.
Posner's appointment followed Jackson's findings of fact unveiled earlier this month, which concluded that Microsoft holds monopoly power in the market for PC operating systems and harmed consumers through its anti-competitive behavior. In his findings, Jackson said Microsoft, which holds more than 90 percent of the market share for PC operating systems, caused "consumer harm by distorting competition."
The Justice Department and 19 states sued Microsoft in May 1998 for broad antitrust violations, including using its monopoly in the Windows operating systems market to thwart competition and harm consumers by charging more than was reasonable for its product.
Analysts believe the sweeping nature of Jackson's findings along with several pending civil suits will compel the Redmond, Wash.-based company to work out a settlement with the government.
Indeed, numerous class-action suits have already been filed against Microsoft in California, Alabama, Louisiana, New York and Florida, alleging the software company overcharged for its Windows 95 operating system after the updated Windows 98 version was released.
Those suits would be avoided if the company works out an appropriate settlement because Jackson's finding of monopoly power would never become final.
Still, because Jackson sided with nearly all of the government's arguments in his preliminary findings, federal prosecutors have indicated they will seek harsh remedies against the firm in the likely event that Jackson rules Microsoft violated antitrust laws, which could make a settlement difficult.
Those remedies could include a breakup of the company, or forcing it to release the valued source code to its Windows operating system. Final oral arguments in the case are scheduled for Feb. 22 before Jackson at Federal District Court in Washington.
Microsoft shares rose 2-1/16 Wednesday to 91-11/16.
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