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Friday, 29 June, 2001, 20:53 GMT 21:53 UK
Gates pushes for settlement
Bill Gates and Appeal Court logo
Microsoft chairman Bill Gates says he wants an out-of-court settlement of his firm's long running anti-trust battle.

He said the path to a deal had been paved by the appeals court, which set aside a ruling that the software giant must be broken up.

But Microsoft has already ruled out any settlement with the US government that would change the company's structure.

Mr Gates told the BBC that Microsoft was interested in a settlement of the company's long-running dispute with the US government over the violation of anti-monopoly laws.

But even if a US deal is reached, the firm still faces a separate anti-trust probe in Europe, European Commission watchdogs have confirmed.

The commission, which in August launched an investigation into Microsoft's behaviour in the internet server market, said it was studying Thursday's appeals court report.

"I would remind you that our investigations are factually and legally separate from [those in] the US," a commission spokeswoman said.

Gates 'pleased'

Mr Gates told the BBC that, despite the appeals court's criticisms of Microsoft's business practices, he would not apologise to competitors for the firm's behaviour.

Thomas Penfield Jackson
Judge Thomas Penfield Jackson: "Tainted"
"Throughout the case, Microsoft has been very open to the settlement option," he said.

"We think that litigation is expensive and distracting and, if possible, we would like to see if a settlement can be reached."

Earlier, Mr Gates said he was "very pleased" with the appeals court's decision which he said "lifts the cloud of break-up".

Damning indictment

The court of appeals said the judge at the original hearing - Judge Thomas Jackson - had opened himself to accusations of bias by making numerous offensive comments about Microsoft during interviews with journalists, while he was still deliberating how to punish the company.

The court said the earlier ruling had been "tainted" by the judge's actions, and it rejected his conclusion that the software giant must be broken up.

However, it agreed in part with the lower court's finding that Microsoft had engaged in illegal anti-competitive behaviour.

Key dates of the legal battle
1995: Court orders Microsoft to scrap terms requiring PC makers to install Internet Explorer
1997: Justice Department claims Microsoft is violating earlier court order
1997: Microsoft ordered to supply Windows 95 without a browser
1998: US attorney general and 20 US states launch anti-trust lawsuits
2000, April: Microsoft found guilty of anti-competitive behaviour
2000, June: Judge orders Microsoft break-up
2001, June: Appeals court sets aside break-up ruling
Analysts said the decision was a major victory for Microsoft and speculated a second break-up ruling was unlikely.

The decision to reverse Judge Jackson's ruling was unanimous, by a 7-0 vote.

The case will now be sent back to a lower court to be reconsidered by a different judge.

In a statement, the US Justice Department said it too was "pleased" with the appeals court, since it had agreed that Microsoft had acted as an illegal monopoly.

US attorney general John Ashcroft described the ruling as a "significant victory".

Gates optimism

Mr Gates said that while Microsoft was still reviewing the details of the court's ruling, it was clear it "significantly narrows" the district court's decision.

"It sets a much higher standard for these issues than the district court applied," he said.

Mr Gates said the past four years had been "challenging" but he was "incredibly optimistic" about Microsoft's future.

The company would now take time to decide what further action needed to be taken on legal issues but the business would move ahead as planned.

"We are moving ahead with Windows XP as a product that has the features that consumers want," Mr Gates said.

"There's nothing in today's ruling that changes our plan for our future products, including Windows XP."

Market surge

When the news of the court ruling broke on Thursday, it caused a surge in US stock markets.

At the close, the Dow Jones industrial average was up 131 points at 10,566. The Nasdaq composite was up 51 points at 2,126.

Trading in Microsoft shares on the Nasdaq was halted after the court's decision and resumed at about 1850 GMT, with dealers reporting heavy buying.

The shares closed at $72.71, up 2.21% on the day.

The BBC's Patrick O'Connell in New York
"On Wall Street they wonder if it'll ever get as far as a new trial with a fresh judge"
The BBC's Ian Pollack
"The case against Microsoft could now go in several directions"
Microsoft's Founder, Bill Gates
"There is definitely some good news for Microsoft in this ruling"
See also:

29 Jun 01 | Business
Judge's view on Microsoft
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