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No ruling in Microsoft antitrust trial

U.S. District Judge Thomas Penfield Jackson, who set today as a deadline for his decision in the landmark Microsoft antitrust trial, has postponed his decision.

U.S. District Judge Thomas Penfield Jackson, who set today as a deadline for his decision in the landmark Microsoft antitrust trial, will postpone his decision, according to a court liaison.

Judge Jackson was expected to rule today, but reports late yesterday indicated he might postpone action for at least a day and possibly for as many as 10 days. "There will be no ruling today," said press liaison Joe Alexander at the U.S. District Court for the District of Columbia.

Microsoft shares rose $2.18, or 2 percent, to $106.25 this morning and were among the most actively traded on Nasdaq.

The software giant's fate now hangs on the skills of two judges: the one presiding over the trial and the court-appointed mediator.

Legal and industry experts warn it is nearly impossible to determine whether a settlement in the trial will be reached before a ruling, which would likely lead to a government request to break up Microsoft.

Richard Posner Government lawyers yesterday continued to pore over an eleventh-hour settlement proposal Microsoft made last week, working with the mediating judge, Richard Posner.

Posner, head of the U.S. Court of Appeals for the 7th Circuit in Chicago, is a highly respected jurist who is believed to be capable of brokering a deal.

"If anyone can make a deal happen, Posner can," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley in Menlo Park, Calif.

Microsoft's settlement proposal, which offered major concessions including uniform Windows pricing and opening part of the source code, apparently signaled to Jackson that Microsoft is seriously attempting to settle the case. The software maker apparently extended the terms of the proposal to its Windows 2000 operating system, the company's most important product line.

Still, the progress of settlement talks is very difficult to gauge and can change literally by the hour, warned Gray.

"The point is, nobody knows what's going to happen," he said.

Yesterday, the possibility that a federal judge might rule in the antitrust case pulled down the software maker's stock $7.62, nearly 7 percent, closing at $104.62. Settlement rumors last week lifted Microsoft's stock nearly $10.

"Pretty much anything is on the table from Microsoft's perspective," said Gartner Group analyst Michael Gartenberg. "The only stumbling point would be restricting (Microsoft's) freedom to integrate future features into its operating system. They don't want to be locked out of" developing future products, he said.

Partly because Microsoft is so pervasive and partly because of its influence over the computing industry, any settlement offer by the company is going to come with a Pandora's Box of unexpected effects and unforeseen consequences. The current case, after all, results from the fact that a clause in a 1994 agreement allowed Microsoft to integrate Internet Explorer into the Windows operating system.

Microsoft's day in court The possible spoiler to negotiations is growing dissension among the 19 states, say sources familiar with the negotiations. Attorneys general for Connecticut, New York and Wisconsin--the states with the most influence over negotiations--may no longer be united on what to do about Microsoft.

Dissension among the states is nothing new, but a split among the three leaders--with one another or with the Justice Department--could greatly compromise the negotiations, warn legal experts.

An ongoing series of leaks about negotiations indicate the problems are serious and more than just issues with Microsoft's proposal.

"The leaks are not a good sign because it indicates these folks have come to some kind of impasse," Gartenberg said. "Let's face it, they've been at an impasse for two years."

Connecticut Attorney General Richard Blumenthal has been a vocal advocate for punishing Microsoft harshly and appropriately for its behavior. But in recent weeks, the Justice Department has shown more willingness to accept a conduct remedy rather than one compelling a Microsoft breakup. Kevin O'Connor, Wisconsin's assistant attorney general, is rumored to be willing to accept an "appropriate" conduct remedy rather than a breakup of the software giant.

Microsoft has "got to come up with something the DOJ can live with, the judge can live with, and all the states have got to live with. That's a pretty big mix of folks to agree on something that never in the past have been able to do that," said Gartenberg.