In its proposal, Microsoft says it would consider disclosing some of Windows source code, including application-programming interfaces, making it easier for rival software makers to write Windows programs, according to the Wall Street Journal. Microsoft's settlement offer also agrees to separate its Internet Explorer browser from Windows, the Journal reported.
Additionally, the proposed settlement states that Microsoft would accept punishment as long as it would not be required to admit that it violated the law, and that it would agree to some oversight of its business practices, according to ABC News. But the proposal reportedly says Microsoft will not accept government oversight or control of software development or innovation, or business strategy.
Stories by the Journal and Associated Press say that the government's legal team was so underwhelmed by the proposal that there were no immediate plans to fly out to Chicago to meet with court-appointed mediator Judge Richard Posner.
None of the news reports names its sources. Spokespeople for the DOJ and Microsoft did not comment.
Microsoft's bid to settle the antitrust case filed by the Department of Justice, 19 states and the District of Columbia nearly two years ago came a few days after a meeting with District Court Judge Thomas Penfield Jackson.
Reports say Jackson told representatives of both sides that he planned to issue his ruling in the case on Tuesday unless progress toward a settlement was reached.
Microsoft has been on the defensive since November, when Jackson issued his findings of fact, saying that Microsoft enjoys a monopoly in the market for PC operating systems. The findings were highly critical of Microsoft's business practices and were seen as a strong indicator of how the judge would rule in the final outcome, but Jackson also appointed Posner as mediator and encouraged the sides to talk.
Microsoft has argued that it did not have a monopoly and that offering Windows 98 and its Internet Explorer browser as a bundled product was innovative and benefited consumers. The company has referred to the idea of a breakup as "reckless and irresponsible."