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banner Monday, 27 March, 2000, 13:42 GMT 14:42 UK
Microsoft settlement hopes fade
The Microsoft trial judge
Judge Jackson is expected to rule on Tuesday
The US Government is reported to have rejected a last-minute settlement in its anti-trust case against software giant Microsoft.

Newspaper reports from Washington say officials are highly sceptical of the proposals from Microsoft - said to include a promise to separate its Windows operating system from its internet-browser software.

The Microsoft Trial
Judge Thomas Penfield Jackson is expected to deliver his verdict on Tuesday unless the two sides make progress in the settlement talks.

The judge has hinted that he will rule against the company, which stands accused of abusing its monopoly power over the computer industry by forcing Windows customers to use Microsoft software to connect with the internet.

Judge's options
Break-up - Split into three firms selling operating systems, applications and internet content respectively
Open source code - Competitors could add or modify Windows to use their own software
Fair pricing - Bar on discounts to firms which exclusively use its software
Baby Bills - Create several identical versions of Microsoft
The Justice Department and Microsoft have declined to comment.

Correspondents say the government has now retreated from plans to break up Microsoft if the company loses the case.

Both sides have reasons to push for a settlement instead of waiting for a ruling by Judge Jackson.

Late last year, the judge found that Microsoft used monopoly power to harm consumers, competitors and other companies.

Most court watchers expect Judge Jackson to find that Microsoft is guilty of some anti-trust violations.

If he does, he could force the company to change its behaviour or order the break up of the company.

States soften stance

Microsoft has vowed to fight a break-up, and has expressed a desire to settle the case.

A ruling could also be used against the software giant in the more than 100 class-action lawsuits filed against it.

Bill Gates, Microsoft boss
Bill Gates has argued against break-up
The Justice Department has hinted that it might be open to broad restrictions on Microsoft's market behaviour instead of splitting the company.

Some of the 19 states that joined the federal government in a suit have shown a willingness to soften their position, opening up some room for negotiation.

By agreeing to a settlement, the department would avoid a lengthy legal battle with Microsoft in the appellate courts, and the agreement could take effect immediately.

The department would also avoid the risk that Judge Jackson's ruling be overturned on appeal.

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See also:

14 Feb 00 | Microsoft
The Trial: Key Moments
22 Feb 00 | Microsoft
Judge hints at Microsoft break-up
22 Feb 00 | Microsoft
What's it all about?
14 Feb 00 | Microsoft
Microsoft: The charge sheet
14 Feb 00 | Microsoft
The Courtroom Despatches
16 Feb 00 | Business
Windows 2000: Special report
09 Feb 00 | Business
EU probes Windows
26 Jan 00 | Business
Court blow for Microsoft
13 Jan 00 | Business
Software giant 'faces split'
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