Agreement reached in Microsoft antitrust case

  • Wednesday, October 31, 2001 9:00pm
  • Business

Associated Press

WASHINGTON — Microsoft Corp. and the Justice Department reached a tentative agreement Wednesday to settle the historic antitrust case against the software giant, and state attorneys general were reviewing terms of the deal, according to people familiar with the talks.

Terms of the prospective settlement were closely guarded, and those close to the negotiations cautioned that precise language was still being worked out even between Microsoft and the Justice Department.

The attorneys generals from the states that sued Microsoft for antitrust violations were weighing whether to sign onto the deal, the sources said.

Charles James, assistant U.S. attorney for antitrust, disclosed the agreement to the attorneys general on Wednesday and said Microsoft also would accept the terms, the sources said, speaking only on condition of anonymity.

The computer industry has eagerly been monitoring the talks, looking for a possible settlement and hoping it would combine with the release of Microsoft’s new Windows XP operating system to invigorate the lagging industry.

The new trial judge, U.S. District Judge Colleen Kollar-Kotelly has set a deadline of Friday to reach a settlement. The sides — including state prosecutors from Iowa, Connecticut, New York and Wisconsin — met late into the night Wednesday with mediator Eric Green in Washington, D.C.

The considerations in the coming days by state attorneys general and their top lawyers are important. The case was nearly settled during previous negotiations under U.S. Circuit Court Judge Richard Posner, who hinted afterward that states had spoiled an agreement by seeking tough penalties that Microsoft rejected.

The states have in the past suggested they would press forward against Microsoft if the U.S. government settles the case in ways unacceptable to them.

A spokeswoman for the Justice Department, Mindy Tucker, declined to comment on the talks.

Microsoft Chairman Bill Gates has hinted in recent days of successful negotiations, saying on "The Charlie Rose Show" last week that he was "fairly optimistic" an agreement would be reached. Microsoft spokesman Vivek Varma said Wednesday he would not discuss "any aspect of the confidential discussions" but added that, "We believe a settlement would be good for consumers and the overall economy."

An industry trade group that has been critical of Microsoft’s business practices braced for the deal, issuing a statement late Wednesday accusing the Bush administration of "selling out" by seeking weak penalties.

The Washington-based Computer and Communications Industry Association charged the administration wasn’t pushing for tough enough penalties such as requiring Microsoft to disclose its source code blueprints for its flagship Windows operating system.

"The Justice Department isn’t settling this case, it is selling out consumers, competition, and all those who want a vibrant, innovative high tech industry contributing strength to our economy," the group’s president, Ed Black, said in a statement.

Microsoft and Justice officials would not immediately comment on the group’s charges, but a pro-Microsoft trade group, the Washington-based Association for Competitive Technology, said only Microsoft’s competitors don’t want to see a settlement. The head of the group, Jonathan Zuck, said a settlement is desirable "particularly in this time of economic downturn and national crisis."

Lawyers and executives for Microsoft have previously bristled over suggestions that any settlement would require them to disclose the "source code" blueprints for the company’s monopoly Windows operating system, the underpinnings of its multibillion-dollar business.

Microsoft officials also have warned they wouldn’t accept any broad prohibitions against bundling new features into Windows.

James, the antitrust chief, recently announced the government won’t seek to break up Microsoft and will not pursue that part of the original lawsuit that was thrown into question by a federal appeals court over the summer.

He also decided not to try to block Microsoft from releasing Windows XP, its newest version of its operating system.

The original judge in the case, Thomas Penfield Jackson, ordered the breakup of the software giant into two companies after concluding Microsoft violated antitrust laws by illegally stifling its competitors.

But a federal appeals court reversed that penalty this summer, and appointed a new judge to determine a new penalty in one of the most significant monopoly cases in American history.

The new judge strongly urged both sides to settle the case last month and gave them a deadline of Friday.

One person who had been briefed on some of the draft settlement proposals being discussed in recent days, who spoke on condition of anonymity, said the ideas being discussed included:

_Letting Microsoft add new features into its flagship Windows software, but requiring the company also to offer a version that doesn’t include those additions.

_Banning restrictive contracts that would force computer makers to buy versions of Windows with new features, but allowing financial incentives such as discounts to make those versions more enticing.

_Forcing Microsoft to reveal parts of its Windows blueprints relating to its Internet browser software, but not the blueprints to Windows.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.