Judge Orders Microsoft, Government to Settle Antitrust Case

Judge Colleen Kollar-Kotelly ordered Microsoft and the US government to meet around the clock for "intensive" settlement negotiations and gave the two sides until November 2 to come to an agreement. If they aren't able to settle the case, she says, Microsoft will face the harshest and broadest possible remedies available, which the court will administer after a quick series of hearings in the spring. The judge gave the somewhat unprecedented instructions in order to put a swift end to the case, which has dragged on for years.

"It's my view that if everybody is reasonable, a fair settlement should be reached," Kollar-Kotelly said Friday in a short hearing with Microsoft and government lawyers. She then instructed them to "engage in discussions 7 days a week, 24 hours a day" for the next 2 weeks. If the two sides don't make any progress within 2 weeks, she will appoint a mediator, who will report back every 10 days. If the sides are unable to agree to a settlement by November 2, the negotiations are over, and Microsoft will face a short hearing in early March. And Kollar-Kotelly has made it clear that by that point she won't limit the scope of the possible remedies.

Among these remedies is the possibility that Microsoft will be forced to open up the source code to its Windows products. Microsoft lawyers complained to Kollar-Kotelly that such a decision would be "devastating" to the company and asked that the remedy phase focus solely the company's behavior the court found to be illegal. The judge brushed aside this request, noting that precedent and Microsoft's behavior gave her the opportunity to ensure that the company is never able to illegally thwart competition again. To avoid such a move, she said, simply settle the case--now.

"The court cannot emphasize too strongly the importance of making these efforts to settle the case and resolve the parties' differences in this time of rapid national change," the judge wrote in Friday's order. "The claims by plaintiffs of anticompetitive conduct by Microsoft arose over 6 years ago, and these cases have been litigated in the trial and appellate court for \[more than\] 4 years. As the Court of Appeals has noted, the relevant timeframe for this dispute spans 'an eternity in the computer industry.' "

Microsoft's adversaries, which include the US Department of Justice (DOJ) and 18 US states, say that they are happy with the Judge's order and projected timetable. "We certainly are pleased with the court's determination to move quickly in the case," said Charles A. James, who now heads the DOJ's antitrust division. "We hope the talks will be successful. If not, we look forward to proceeding in March."

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