Jurist Named to Oversee Microsoft Talks
In a bold step, the judge in the landmark Microsoft antitrust case on Friday appointed a fellow jurist to mediate voluntary settlement talks between Microsoft and the government in an apparent effort to trigger an out-of-court settlement.
U.S. District Judge Thomas Penfield Jackson appointed as mediator Richard A. Posner, an influential 60-year-old antitrust scholar who is chief judge for the U.S. 7th Circuit Court of Appeals in Chicago.
Posner, who has written 30 books on everything from antitrust law to the Clinton sex scandal, is a conservative and well-respected jurist who is credited with popularizing the “Chicago school” of antitrust legal analysis that generally favors a free-market approach to commerce.
The Chicago school contends that antitrust laws are often enforced against innovative companies and it resists applying antitrust laws simply because a company holds a dominant market share. Appointing Posner as a mediator “makes a lot of sense. It’s like sending a hawk to peace talks,” said Ernest Gellhorn, an antitrust expert who is a professor at George Mason University Law School. “It leads me to think for the first time a settlement is a strong possibility.”
After Posner’s appointment, Microsoft spokesman Mark Murray said, “We think this is essentially a very positive step toward a possible resolution of the case.”
A spokeswoman for the Justice Department was equally positive. “The department has always been willing to seek a settlement that would promote competition, innovation and consumer choice,” said Gina Talamona.
After the announcement, shares of Microsoft rose to as high as $90.81 in after-hours trading Friday, up from their Nasdaq close at $86 a share, which was up $1.06 for the day.
“For the Justice Department to have a fairly conservative judge as the mediator indicates that they are interested in settling this case . . . [or] are extremely confident” that the strong rebuke Jackson gave Microsoft earlier this month will be embraced by Posner, said Donald I. Baker, a former Justice Department lawyer now in private practice in Washington.
Posner’s appointment comes two weeks after Jackson condemned Microsoft in a 207-page finding of fact which said the software giant is a monopoly that has aggressively used that power in “stifling innovation” by its rivals.
The selection of a mediator also represents a further escalation of Jackson’s effort to get Microsoft and the government to settle their differences. The judge previously announced he would issue his verdict on the case in two phases--findings of fact and conclusions of law--to encourage the two sides to strike an out-of-court deal.
Legal experts say Microsoft now risks devastating legal and financial outcomes if, as expected, Judge Jackson’s findings of fact are followed by an equally tough final ruling against the company. Jackson’s final ruling is expected early next year.
The Justice Department, 19 states and the District of Columbia have accused Redmond, Wash.-based Microsoft of using its flagship Windows operating system--which runs 90% of the world’s personal computers--to dominate emerging software technology such as Internet Web browsers and multimedia applications.
This week, Microsoft Chairman Bill Gates indicated that he is willing to negotiate on some points of the antitrust case, but he appeared adamant on others.
Gates told Time magazine and ABC Television’s “Good Morning America” that Microsoft won’t surrender its right to decide which features it can add to Windows. He also indicated his opposition to a public auction of the software code for Windows.
But Gates seemed to leave the door open for another stiff sanction: breaking up Microsoft.
When ABC’s Diane Sawyer asked Gates this week why he hadn’t publicly indicated he would fight “tooth and nail” against a breakup of his company, Gates didn’t specifically rule out a breakup as he had with some other remedies.
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The Times’ wire services were used in compiling this report.
