Microsoft deal still possible

The US Justice Department yesterday opened the door to further settlement talks with Microsoft, in an effort to avoid a lengthy…

The US Justice Department yesterday opened the door to further settlement talks with Microsoft, in an effort to avoid a lengthy legal battle over the break-up of the world's biggest software company.

Mr Joel Klein, head of the department's antitrust division, said he was "prepared to engage in meaningful settlement negotiations" to ensure Microsoft does not repeat its monopoly abuses.

His comments echoed those of Judge Thomas Penfield Jackson, who ordered the break-up and sweeping restrictions on Wednesday.

He said he wanted both sides to "swallow their own reluctance to compromise and reach a remedy that both sides, if not elated by, nevertheless are willing to extend".

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Microsoft has already said it would be ready to negotiate. Mr Bill Neukom, vice-president for law and corporate affairs, said the company would never "close the door to good faith negotiations to resolve differences".

But the company yesterday dismissed Mr Klein's comments as "simply posturing". Microsoft said: "If there was an opportunity for a serious discussion, we would be interested. But we don't believe that is what this is."

There seems little immediate chance that the sides can negotiate an out-of-court settlement, exhaustive talks having collapsed in April. Negotiations had continued for three months without success, despite mediation by Mr Richard Posner, head of the Chicago court of appeals.

Microsoft's lawyers yesterday filed for a stay of Judge Jackson's ruling, including the strict curbs on the company's business practices that would come into force in 90 days. The restrictions include requiring Microsoft to sell its Windows operating software on uniform terms to all computer-makers and disclosing software codes in a timely manner.

The break-up will be delayed until the appeals process is over, but Microsoft lawyers are keen to alter the timetable. Under the judgment, it has four months to detail plans for the split.

The ruling, if it is upheld, would divide Microsoft into an operating system company managing Windows and an applications company managing products such as Office software. Bill Gates insisted he was confident he would win on appeal.