Microsoft Talks Face Familiar Hurdles

Settlement talks between Microsoft Corp. and government antitrust enforcers probably will run up against the same obstacles that have thwarted negotiators for much of the last seven years, legal experts say.

The world’s largest software maker met Monday with state and federal officials for the first time since an appeals court ruled that Microsoft had violated antitrust laws, people involved in the case said. The talks could include a discussion of a framework for settlement, they said.

The talks ultimately could focus on Microsoft’s plan to include a variety of new programs--including videoconferencing, Internet telephone service and instant messaging--in its new Windows XP operating system, which is due in stores Oct. 25. State antitrust enforcers have expressed concern that Microsoft might use XP to extend its dominance to the Internet.

“The toughest issue is what, if any, restrictions will there be on XP,” said Robert Litan, a former Justice Department antitrust enforcer now at the Brookings Institution in Washington.

The question is how much leeway Microsoft will have to roll new programs into the operating system and require computer makers to take the whole package.

Microsoft spokesman Vivek Varma wouldn’t comment on the talks, saying only that “we look forward to finding a way to resolve the remaining issues in the case with the government.” The Justice Department declined to comment. A spokesman for Iowa Atty. Gen. Tom Miller, who has taken the lead in the Microsoft litigation, also refused to comment.

The appeals court overturned a breakup order of Microsoft, while upholding a trial judge’s conclusion that the company illegally squashed competition to Windows.

Microsoft shares fell $2.09 to $67.09 in Nasdaq trading Monday.

The question of integrating new features into Windows has been a central theme in the government’s clashes with Microsoft. It was at the core of a disagreement between the Justice Department and Microsoft over a 1994 antitrust settlement.

Microsoft contended the accord left it free to include an Internet browser in Windows. The Justice Department disagreed, and the two sides ended up in court in 1997.

In the current case, settlement talks broke down last year.