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Friday, 9 June, 2000, 17:21 GMT 18:21 UK
Microsoft welcomes talks offer
Steve Ballmer would welcome more talks with the authorities
Steve Ballmer would welcome more talks
Microsoft has said that it welcomed an offer from the US Justice Department for more talks that could potentially lead to a settlement in the company's anti-trust case.

On Thursday, the department's anti-trust chief, Joel Klein, said the department was ready to negotiate with Microsoft over the anti-trust ruling that the company should be split in two.

But Mr Klein said he would talk to Microsoft if the negotiations were "meaningful" and dealt with the company's violations.

Microsoft's chief executive Steve Ballmer said on Friday that Microsoft would be pleased to have more talks with the authorities.
Joel Klein, assistant attorney-general, Anti-trust Department
Joel Klein: "always prefer settlement"

"We would welcome that kind of opportunity, but it would be inappropriate for me to speculate on that here," he said in Brussels, where he is attending a business summit.

"We would love to settle this case. We were unable to in the last round discussion," he said.

He reiterated previous statements that the ruling would disrupt the growth of e-commerce, stifle innovation and put up prices.

"The judgement will restrict innovation and increase prices for personal computers and software. There were errors of law and fact in the judgement," he said.

Microsoft strategy

Microsoft has been plotting its own strategy to try to avoid complying with the ruling.

Judge Thomas Penfield Jackson said the company's abuse of its dominance in the market meant it should now be split into two separate businesses:

  • One to produce and sell the Windows operating system
  • The other to handle Microsoft Office and other applications software, including the Internet Explorer web browser
The judge ordered the company to submit a plan for its break-up within four months, with the division to take place within a year.

But Microsoft founder Bill Gates says he will be seeking a legal stay to avoid having to comply with any elements of the ruling while it is under appeal.

He said: "That would prevent us from having to be distracted by any of the interim measures and allow us just to do our work while we wait for the higher court to rule."

Supreme Court

Microsoft's appeal is expected to go directly to the Supreme Court, saving the time it would take to progress through the federal appeal court in Washington.

Mr Klein said it was important to get the Supreme Court to agree quickly to any Microsoft appeal to resolve key issues in the high-tech industry.

The company is expected to say that it was not allowed time to present its objections when it pursues its appeal.

It is also likely to argue that the punishment does not fit the crime - as the company puts it: "We have been charged with burglary and convicted of murder".

Will it make any difference?

Opinion is mixed as to what difference the Microsoft ruling will make to industry and consumers.
Microsoft founder Bill Gates
Bill Gates: Fighting talk
Jon Bernstein, editor in chief of online news service Silicon.com, agrees with the US government that the ruling will result in cheaper and better products.

He said: "Apple and all Microsoft's competitors will expect to gain from this."

However, he also said the split did not in itself stop Microsoft's market dominance: "Microsoft will still be the number one player in operating systems and the number one player in applications."

Legal opinion is mixed as to how strong Microsoft's chances are on appeal.

Attorney-general Janet Reno, whose department led the legal action against Microsoft, said the ruling would have a profound impact "not only by promoting competition in the software industry, but by reaffirming the importance of anti-trust laws in the software era".

New York attorney-general Eliot Spitzer called the decision a "pretty scathing assault on Microsoft".

"For a cautious judge to reach this decision, it says a great deal about Microsoft's record of recent years."

A way to go yet

However, Microsoft has a track record of success in legal battles and Bill Gates has made it clear he views the ruling as the beginning of a new chapter in the case rather than the end.

Judge Jackson had previously ruled that Microsoft had broken anti-trust laws by using its dominant position in the computer operating system market to unfair competitive advantage.

He had then chosen to break up the company instead of imposing stringent restrictions, he said, because Microsoft had proven to be "untrustworthy" and "disingenuous".

He said Microsoft had shown no inclination to change its ways and "may yet do to other markets what it has already done in the PC operating system and browser markets."

 WATCH/LISTEN
 ON THIS STORY
The BBC's Rory Cellan-Jones
"In computer shops the world over there's little choice"
Bill Gates, Microsoft founder
"Today is the start of a new phase in this case"
Janet Reno, US Attorney General
"The court's remedy strikes the right balance"


Complete coverage


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See also:

07 Jun 00 | Business
Will the ruling affect you?
07 Jun 00 | Business
Microsoft's long battle ahead
09 Jun 00 | Business
Microsoft: Winners and Losers
08 Jun 00 | Business
Microsoft fights break-up
07 Jun 00 | Business
Will splitting up Microsoft work?
07 Jun 00 | Business
Has Microsoft stifled innovation?
08 Jun 00 | Business
Extracts from the Microsoft ruling
26 Apr 00 | Microsoft
Timeline of the legal battle
07 Jun 00 | Business
Microsoft: No longer the biggest
08 Jun 00 | Business
US press debates 'drastic' verdict
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