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Friday, 2 November, 2001, 12:47 GMT
Microsoft deal 'faces delay'
Microsoft logo, BBC
The US Justice Department has agreed an out-of-court settlement with Microsoft in the anti-trust case against the software giant, according to a report in the Wall Street Journal newspaper.

The two sides will present a settlement to the judge in the case on Friday, the newspaper said.

But the 18 US states that also sued Microsoft are reportedly planning to ask for more time to consider their response to the settlement.

If their demand is granted the case could drag on into next week or longer, as the states work out their position.

The states could even continue a separate legal action against Microsoft - without the government's participation - raising the prospect of further hearings into how Microsoft can be stopped from abusing its monopoly power.

Microsoft on Friday declined to comment on the report but said it remained keen to reach a settlement.

'Tough measures'

Some states are understood to want tougher sanctions against Microsoft than the ones currently under consideration.

The lawyer acting for the 18 states is planning to ask judge Colleen Kollar-Kotelly for another few days to file a response, according to unnamed sources quoted in the newspaper report.

Judge Kollar-Kotelly had originally given all parties until Friday to come up with a settlement.

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 closed up nearly 6% on Thursday as traders anticipated the lifting of the cloud of litigation 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, the appeals court had 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, might have given the appearance of bias against the company.

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

'Terms of the deal'

Microsoft has only commented that it is "working hard to achieve a settlement", stressing that nothing firm is in place yet.

The deal reportedly agreed by the Justice Department would leave the software giant's latest launch, Windows XP, unchanged in exchange for an agreement to disclose technical information to rivals.

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

The deal would also make it easier for consumers to remove certain features and install rival programmes from other software makers, sources qouted by the Associated Press news agency claimed.

Restrictions would be placed on Microsoft for the next five years and could be extended by a further two if it was adjudged to have broken the terms of the deal, the sources claimed.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Stephen Evans
"Microsoft isn't quite out of the woods yet"
David Pringle of the Wall Street Journal
"This is quite a lenient settlement"
See also:

01 Nov 01 | Business
Microsoft 'close to anti-trust deal'
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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