Microsoft's eleventh-hour olive branch delays DoJ ruling

Microsoft's eleventh-hour settlement proposal to end the antitrust case brought against it by the US Department of Justice (DoJ) prompted presiding district court Judge Thomas Penfield Jackson to postpone his decision on the landmark trial last week.

Judge Jackson was due to deliver a verdict on March 22 (Australian time), but he delayed his ruling to give the DoJ additional time to consider Microsoft's offer.

Central to the case is Microsoft's alleged ‘tying' of its Internet Explorer Web browser to its Windows operating system. Government prosecutors argue that Microsoft used its monopoly power in the operating systems market in an attempt to also control the Internet browser market.

The settlement proposal reportedly does not acknowledge antitrust violations nor does it allow for restrictions in how Microsoft develops and markets Windows in future. However, it is understood to include an offer by Microsoft to untie the browser from some versions of Windows and other major concessions including uniform Windows pricing and a commitment to open parts of its source code.

The terms of the proposal are believed to have included its Windows 2000 operating system, the company's most important product line, an apparent signal to Jackson that Microsoft is seriously attempting to settle the case. For its part, the DoJ is understood to have backed away from trying to break Microsoft up, realising subsequent appeals could undermine its moves to restrain the software giant.

At presstime, Judge Jackson had not announced a new deadline for the parties to settle the case, but US reports indicated up to 10 additional days could be allowed.

In the circumstances, Microsoft's fate could depend on Richard Posner, chief judge in the 7th Circuit Court of Appeals in Chicago, who was appointed by Judge Jackson to serve as mediator in the case. Posner is working with US government prosecutors as they pore over the terms of Microsoft's offer, continuing the trend of the mediation process which has reportedly seen the two sides fail to meet in person. Instead, Posner has handled the conveying back and forth of e-mails and faxes containing the latest proposals from each side.

The wild card in the negotiations is the group of 19 US state attorneys general and the District of Columbia counsel. Any agreement reached between Microsoft and the DoJ would be useless unless the states and the District were to sign off on it as well. Reports indicated that there has been dissension among the states, as some continued to push for Microsoft to be broken up.

Microsoft has been on the defensive since Judge Jackson issued his findings of fact in November, which said Microsoft enjoys a monopoly in the market for PC operating systems.

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