MS downplays reported DoJ settlement talks

Microsoft is downplaying a report that it has stepped up negotiations with the US Department of Justice (DoJ) to settle its antitrust case, which is in recess until at least mid-April.

In Monday's editions, The Seattle Times quoted a source close to the Justice Department who estimated that there is a 60 per cent chance that the case would be settled soon. However, the newspaper quoted another source, close to Microsoft, who said a settlement was unlikely because the two sides are far apart in their perceptions of the trial.

In 1998, the two sides fruitlessly negotiated up until the last minute before the government filed the antitrust suit in May.

In light of Intel's settlement with the Federal Trade Commission (FTC), two key Microsoft officials were peppered with questions about the Justice Department trial, and a possible settlement, at a media briefing on Monday.

Microsoft Chief Operating Officer Bob Herbold said the two cases are not comparable, adding that the Intel situation was a licensing dispute that mirrored Microsoft's fight with the Justice Department a few years ago, which led to the 1995 consent decree agreed upon by the two sides.

"We view our situation as our situation," Herbold said. "We are going to do what's right for our consumers, and I don't believe you should think it affects our basic thinking."

Herbold and Microsoft general counsel Brad Smith would not comment on possible settlement negotiations, except to say that Microsoft would not be opposed to such talks. They both characterised the case as a question over the right to innovate, a mantra that Microsoft has repeated for months.

"We're on the side of the angels," Herbold insisted.

Herbold and Smith also sharply disputed the notion that Microsoft has been badly damaged in the trial. The company's defense suffered a series of gaffes, from submitting generously edited videotapes as evidence to seeing key executives retract testimony.

Smith called such developments "daily theatrics," and said the company was making its case anyway. He would not speculate on how US District Judge Thomas Penfield Jackson -- who has been extremely critical of Microsoft in the courtroom -- would rule, or whether the company's legal team was anticipating Jackson to rule against Microsoft and already planning its appeal.

Justice Department officials did not immediately respond to requests for comment.

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Bob Trott

PC World

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