According to reports, Microsoft will seek an out-of-court settlement with the US federal government and 19 states that have accused the software giant of predatory business practices. The move apparently follows advice by District Court Judge Thomas Penfield Jackson, who last month privately urged the parties to consider a settlement.

It might be a bit early to break out the champagne, however. While one Microsoft executive has said it was prepared to modify contracts with its Internet partners that the government alleges are exclusionary and allow manufacturers of personal computers greater freedom to add features to the Windows operating system, the company is insisting on the right to integrate certain operating features into Windows, saying such practices benefit consumers and keep prices down.

It was this practice which first triggered the case against Microsoft when the company "bundled" its Internet Explorer browser into Windows, a move that was seen as unfairly harming rival Netscape.