Microsoft-Mediation Efforts Abandoned, Likely Impact on Antitrust Case

The four-month mediation process between Microsoft and the government in the antitrust case has come to an end, with Judge Richard A. Posner stating that the parties' disagreements are too deep-seated to be resolved. This development suggests that the trial judge, Thomas Penfield Jackson, will issue his decision in the case within the next few days. The government's findings of fact, issued in November, alleged that Microsoft used its monopoly power to threaten and bully competitors, stifling innovation in the software industry. The company's chairman, William H. Gates, expressed disappointment, stating that the government refused to agree to a fair and reasonable settlement that would have resolved the case in the best interests of consumers and the industry.

Key Takeaways:

• The four-month mediation process between Microsoft and the government in the antitrust case has been abandoned, with Judge Richard A. Posner stating that the parties' disagreements are too deep-seated to be resolved.
• The trial judge, Thomas Penfield Jackson, is expected to issue his decision in the case within the next few days.
• The government's findings of fact, issued in November, alleged that Microsoft used its monopoly power to threaten and bully competitors, stifling innovation in the software industry.
• The company's chairman, William H. Gates, expressed disappointment, stating that the government refused to agree to a fair and reasonable settlement that would have resolved the case in the best interests of consumers and the industry.
• Microsoft and the government had been exchanging proposals and counterproposals over the last week, with the Justice Department sending its latest proposal to Judge Posner late in the week.
• The 19 state attorneys general, who are partners in the suit, were unhappy with Microsoft's offer and the Justice Department's response.
• Several attorneys general expressed severe misgivings about some of the concessions Microsoft had deemed acceptable.
• Microsoft claimed that the additional demands from the states were the death blow to the negotiations, while one participant said the company's response was "not even close" to the Justice Department proposal.
• Computer industry leaders expressed relief at the news that the talks broke down, with one executive saying, "The hard-liners won."
• The proposed agreement, put forward by the Justice Department, included several provisions, including a uniform pricing schedule for Windows, prohibition on tying products to Windows by sales contract, and restriction on exclusive contracts with other companies.

Statistics:

• The mediation process lasted four months.
• The government's findings of fact, issued in November, alleged Microsoft used its monopoly power to threaten and bully competitors 78 times. (Source: The findings of fact)
• The trial judge, Thomas Penfield Jackson, has postponed a decision in the case to give the parties one more week to reach a settlement. (Source: The court proceedings)
• The proposed agreement, put forward by the Justice Department, included a provision to establish a uniform pricing schedule for Windows. (Source: The proposed agreement)

Sources:

• Text, Page 22.
• The findings of fact, issued in November.
• The court proceedings.
• The proposed agreement.
• The Justice Department's statement.
• The interview with Attorney General Richard A. Blumenthal of Connecticut.
• The interview with Ken Wasch, president of the Software and Information Industry Association.