Microsoft Awaits Higher Judgment

WASHINGTON (04/04/2000) - Microsoft Corp. maintained its defiant posture and promised to appeal U.S. District Court Judge Thomas Penfield Jackson's latest ruling against the Redmond, Wash., software giant issued today. Chairman Bill Gates said his company was prepared to appeal the judge's 43-page "findings of law," which concluded that Microsoft violated three provisions o fthe Sherman Antitrust Act and sought to monopolize the market for Web browsers.

"We believe we have a strong case on appeal," Gates said shortly after the release of Jackson's ruling. "The appeals court has already affirmed Microsoft's right to build Internet capabilities into [the] Windows operating system to benefit consumers." Calling Microsoft's actions "predatory" and "oppressive," Judge Jackson said Microsoft illegally sought to maintain the monopoly position of its Windows operating system and capture a new monopoly in the Web browsing software market. Gates and other Microsoft officials sought to reassure investors that the company would stay focused and continue to innovate.

They spoke after shareholders bailed out of the company's stock in heavy trading Monday, sending the shares down $15.38, or 14.47 percent, to $90.88.

"The ruling does not change the challenges and opportunities before us," said Microsoft president and CEO Steve Ballmer. "Windows 2000 is the foundation for a whole new generation of products and services that will make the dream of next-generation Windows services on the Internet a powerful reality."

General Counsel William Neukom pointed out that Jackson's ruling found the company had not improperly limited distribution of the Netscape Web browser when it struck exclusive distribution agreements with Internet service providers. "We are somewhat encouraged by aspects of this," Neukom said. He predicted Jackson would issue a final ruling, laying out remedies in the case, within a few months. After that, Microsoft would appeal and the remedies would likely be put on hold pending the outcome of the higher court's review, he said.

"We think we will get the better of that -- much the better," Neukom said. CEO Ballmer said Microsoft remained open to settle the case but only if the Department of Justice and state attorneys general show an increased willingness to compromise. "While we remain very open -- we'd love to continue discussion in the appropriate way -- we would need to see an appropriate openness and we'd be glad to engage more in that conversation," Ballmer said. During earlier negotiations, "some of the parties were pushing for extreme things that we didn't think were in anyone's best interests," Gates added.

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