Microsoft in settlement talks

Lawyers for Microsoft Corporation and the U.S. Department of Justice (DOJ) met with their mediator, Judge Richard Posner, Monday in Chicago in an attempt to hammer out a settlement in the historic Microsoft antitrust case. If a settlement is not reached, the trial will proceed and Microsoft will be found guilty of specific U.S. antitrust laws: Judge Thomas Penfield Jackson, who is presiding over the case, has already found that the company has harmed consumers, competitors, and even its own partners in a bid to maintain and extend its Windows and Office monopolies. In a not coincidental move, the DOJ and 19 states that have charged Microsoft with this abuse filed briefs in court Monday that Microsoft violated federal antitrust laws. The judge will use these briefs as a basis for his conclusions of law, due in February unless a settlement is reached.

The filings Monday by the U.S. and state governments are expected to be far reaching. According to sources close to the trial, the DOJ will ask the Judge to find Microsoft guilty of violating the Sherman Act by illegally protecting and extending its Windows monopoly and for conducting illegal business practices. The 19 states will likely seek further charges under individual state laws, bringing an unprecedented legal challenge against the software giant.

If a settlement is reached, experts say the result could be dramatic: The states are allegedly asking for nothing short of the breakup of Microsoft Corporation, while federal regulators have hired a consulting firm that specializes at this sort of corporate restructuring. And a recent reorganization of Microsoft's corporate structure suggests that the company is amenable to some sort of internal restructuring that it hopes the court will find agreeable.

Assuming the trial goes forward, however, Microsoft has until January 17th to file a written reply to today's charges. Written exchanges continue throughout January and then a final oral argument is scheduled for February 22nd

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