WASHINGTON -- Microsoft Corp. says it's willing to listen to any offer to end the software giant's 5-month-old antitrust trial, while government lawyers want the world's largest software company to make the first move, people familiar with the case said.
The standoff suggests investors were premature in betting a settlement is near. Microsoft shares rose $2.8125 yesterday to close at $161.8125. That movement came one day after Intel Corp. settled its own antitrust fight and an article in the Seattle Times cited unidentified sources as saying Microsoft and the government were exploring ways to settle the case.
Microsoft spokesman Greg Shaw wouldn't comment on whether the company was holding talks with the U.S. Justice Department and 19 states that have sued the company. "We are always willing to listen to the government, but there are fundamental principles at stake for us," he said, including Microsoft's refusal to negotiate away its right to integrate World Wide Web browsing technology into Windows 98, a key element of the case.
At the same time, people familiar with the case said there have been no discussions or any proposals from the software giant to settle the lawsuit; government lawyers say that must be the first step taken. The trial of Microsoft, which began in October, is in a six-week recess and will resume April 12.
Analysts said the chances for a settlement are slim.
"I really don't think there will be a settlement. The camps are so far opposed to each other," said John Puricelli, an analyst for A. G. Edwards & Sons in St. Louis. "Microsoft is probably convinced that whatever happens at the trial court they will win on appeal."
U.S. District Judge Thomas Penfield Jackson may have sparked settlement speculation with an off-the-cuff remark to lawyers in the privacy of his chambers when the trial recessed Feb. 26, said people familiar with the case.
Jackson, who would issue a ruling if the nonjury trial runs to conclusion, told the lawyers to use the recess wisely, a comment interpreted as a suggestion to try to seek a settlement. Still, judges in lengthy cases routinely make such requests to lawyers.
Government lawyers told Microsoft the Justice Department and the states will respond to any settlement offer, people familiar with the case said.
Microsoft's general counsel, William Neukom, and its lead trial lawyers, John Warden and Richard Urowsky, are on vacation, according to their offices.
Shaw repeated the company's position that it believes it is winning in court. "We look forward to coming back and completing the trial phase of this case," he said.
The Justice Department and the states accuse the software giant of illegally protecting its dominance of the operating software market by stifling competition from Internet software rivals such as Netscape Communications Corp. The government alleges that Microsoft "welded" its Internet Explorer into Windows 98 to thwart competition from Net-scape.
Intel Corp. reached a tentative settlement of antitrust charges with the U.S. Federal Trade Commission Monday, which averted yesterday's scheduled start of a trial.
"It's a fairly graphic reference point that you know people at Microsoft aren't ignoring," said William Whyman, an analyst with Legg Mason Inc.'s Precursor Group.
Pub Date: 3/10/99