DOJ, Microsoft Negotiations Head Into Weekend

Welcome Guest. | Log In| Register | Membership Benefits

May 15, 1998 (12:00 AM EDT)

DOJ, Microsoft Negotiations Head Into Weekend

By Darryl K. Taft,

Microsoft's ongoing negotiations with the U.S. Department of Justice and state attorneys general are expected to continue into the weekend, as the software giant and the government try to hash out an agreement.

"We are still in discussions, that's about it," said Tom Pilla, a Microsoft spokesman. Beyond that, neither Microsoft nor DOJ officials would comment.

However, sources said participants in Friday's negotiations, held at the DOJ offices, included William Neukom, Microsoft's vice president of law and corporate affairs; Richard Urowsky, Microsoft's outside attorney (from the firm of Sullivan & Cromwell); Joel Klein, chief of the DOJ's antitrust division; and two state attorneys general, Richard Blumenthal of Connecticut and Tom Miller of Iowa.

The DOJ and as many as 19 states were set to file antitrust lawsuits against Microsoft Thursday. But Microsoft (company profile) staved off the lawsuits by making some concessions. In turn, government forces deemed those moves substantial enough to delay filing the suits, which had been honed to focus on Microsoft's contractual agreements with its partners, sources said.

According to sources, part of what is under discussion includes Microsoft's willingness to rewrite some of its contracts that have been limiting to competitors, as well as loosening the company's previously rigid stance on what appears on the boot-up sequence of screens in Windows-driven PCs. The contracts under consideration include those between Microsoft and original equipment manufacturers (OEMs), as well as those with ISPs and Internet content providers.

The government also is seeking concessions on what has been key to its recent scrutiny of Microsoft -- the ability of OEMs to substitute competing Internet browsers for Microsoft's Internet Explorer. The two sides were negotiating how that would be accomplished without favoring Microsoft or its competitors -- namely Netscape Communications, sources said.

However, some Microsoft detractors have speculated that a hitch in negotiations could lie in the DOJ's reported interest in Windows NT.

"One good thing about the DOJ suit is that they leave open the opportunity to amend their complaint and bring new charges later," said a source close to the government's investigation. "That's important for us who are interested in [Microsoft's] monopolization of the NT business. Because [the DOJ] is not ready to file a claim on NT, but they might be later."

Meanwhile, others believe a settlement will be difficult to reach. "I can't imagine what they could be offering that might be important enough to derail the suit, for one simple reason: Microsoft fully believes they'll ultimately be successful," said Ken Wasch, president of the Software Publishers Association. "They don't seem to believe they have to yield at all."

Microsoft's rivals said the company's history is to give in only when it finds itself up against a wall, and then to give only enough to get out of the jam.