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Thursday, 1 November, 2001, 19:47 GMT
Microsoft 'close to anti-trust deal'
Microsoft logo, BBC
The US Justice Department has reportedly offered Microsoft an out-of-court settlement in the anti-trust case against the software giant.

The Justice Department had asked the 18 US states that also sued Microsoft to sign up to the plan, according to a report in the Washington Post newspaper.

The judge in the case, Colleen Kollar-Kotelly, had given both sides until Friday to come up with a settlement.

If they fail, the saga will continue with hearings into how Microsoft can be stopped from abusing its monopoly power in the future.

If a deal can be reached, it would herald the end of the long-running anti-trust case brought by the US Government against Microsoft, which has stretched out over nearly three years.

Microsoft shares were up nearly 6% on Thursday as traders anticipated the lifting of the legal cloud over the company.

Searching for a solution

A US federal appeals court formally sent the Microsoft anti-trust case back to a lower court in August, with Judge Colleen Kollar-Kotelly appointed to hear the case.

Microsoft founder Bill Gates, AP
Bill Gates' anti-trust saga reaches its endgame
In June this year, a US Appeals Court broadly accepted the original judgement, made in June 2000, that Microsoft's business practices had violated anti-trust laws.

But it threw out the proposed remedies - especially the suggestion that Microsoft should be broken up into two separate companies.

One reason for setting aside the remedies were media interviews given by the original judge in the Microsoft case, which, according to the appeal judges, showed bias against the company.

It is a new "remedy" that is now being thrashed out.

Shape of the future

However, the fine details of the settlement are still under discussion and talks could still fall apart.

Microsoft has only commented that it is "working hard to achieve a settlement", stressing that there is nothing firm in place as yet. But the shape of a likely deal is slowly emerging.

It would leave the software giant's latest launch, Windows XP, unchanged in exchange for an agreement to disclose technical information to Microsoft rivals, said Paul Abrahams, Silicon Valley bureau chief for the Financial Times after speaking with the firm.

The deal would also give PC manufacturers more latitude in to load non-Microsoft software into the machines they sell.

But attorney generals from the states of Iowa, California, Connecticut and New York may be inclined to take a tougher line, Mr Abrahams told BBC Radio 5Live.

'Tougher measures'

The two sides, including prosecutors from the states, are thought to have met late into Wednesday night with mediator Eric Green in Washington.

Talks between the justice department and the attorney generals are reported to have continued on Thursday, with some states demanding tougher measures against Microsoft, sources quoted by Reuters news agency said.

The US Department of Justice, together with officials from the states, have declined to comment.

The BBC's Rory Cellan-Jones
"Microsoft may have to unlock the secrets behind windows"
Paul Abraham, The Financial Times
"Negotiations could yet fall through"
See also:

24 Oct 01 | Sci/Tech
Microsoft's XP extends reach
06 Sep 01 | Business
U-turn on Microsoft break-up
13 Jul 01 | Business
US seeks quick end to Microsoft case
18 Oct 01 | Business
Microsoft beats expectations
19 Jul 01 | Business
Microsoft asks for court review
13 Jul 01 | Business
New Mexico breaks ranks on Microsoft
12 Jul 01 | Business
Microsoft in Windows climbdown
25 Oct 01 | Sci/Tech
Windows XP hits the streets
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