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Wednesday, March 24, 1999 Published at 20:47 GMT

Business: The Company File

Microsoft's settlement offer

Microsoft's boss Bill Gates said discussions are ongoing

Microsoft has approached some of the 19 states suing the software giant with a settlement designed to end the prolonged anti-trust dispute.

The BBC's Tanya Beckett: 19 American states are involved in the case
Chairman and chief executive Bill Gates confirmed the company was in talks to settle the dispute.

He said, "There are ongoing discussions and I won't speculate as to the probabilities or anything, but I hope it does get settled."

Microsoft's proposals are understood not to go far enough - raising doubts that its court battle with the US Government and the 19 states will come to an imminent end.

A state attorney general of one of the 19 states involved in the court fight is reported to have said that the proposed settlement was "nowhere near" acceptable and that the measures were "minimalist" and unacceptable.

Ready to settle

The news emerged just days after reports that Microsoft had let the US Department of Justice know that it was willing to settle the bitter dispute.

Microsoft officials are understood to have told the justice department "informally" that they are working on a number of options to end the prolonged trial.

For its part the justice department is sending strong signals that it could be ready to broker an end to the dispute.

However, there are still many issues to overcome, with Microsoft determined to make sure it is allowed to use its software without government intervention in the future.

Newspaper and agency reports quoted Microsoft "sources" close to the case who said the company was ready to take up a suggestion of Judge Thomas Penfield Jackson and negotiate a deal.

Microsoft spokeswoman Erin Brewer said the company "was always willing to talk" with the US Justice Department.

She stressed that negotiations were possible "as long as we can maintain our fundamental right to innovate." A Microsoft official had earlier been quoted as saying that the software giant was not prepared to "compromise (its) ability to innovate and add new features to our products".

No official offer

At the Justice Department, Joel Klein, the head of the anti-trust division, said the government had received no settlement proposal from Microsoft.

He said the justice department had "always been and remains open to a settlement that fully protects consumers and assures that similar anti-trust violations do not occur in the future."

The Federal government and 19 US states are accusing Microsoft of abusing its monopoly power in the Windows operating system which runs on 90% of the world's personal computers. Much of the trial focused on the browser wars and Microsoft's efforts to beat its Internet rival Netscape.


Microsoft is reportedly reviewing where it can offer enough flexibility to satisfy the government's concerns over its behavior.

The company is interested in avoiding "extended additional litigation", as one company official put it.

A settlement would be a dramatic breakthrough after a bruising court battle. However, anti-trust experts say the chances of a deal are "remote."

The trial is currently in recess, with both sides expected to wrap up their arguments in mid-April. Experts say that the case could drag on for years, as any judgement is likely to be appealed.

Intel, the world's leading maker of computer microchips, recently reached an agreement with US regulators, just a day before its trial on anti-trust charges was due to begin.

Since the trial began, Netscape has been acquired by America Online, the largest Internet Service Provider in the United States.

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Antitrust Division - US Department of Justice

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