- WASHINGTON (Reuters) - The
U.S. government favors breaking up Microsoft Corp. to settle the firm's
landmark antitrust case, people familiar with mediation talks taking place
in Chicago said on Wednesday.
- The sources said that details of the remedy remain unclear,
but it had emerged that the Justice Department and the 19 states involved
in the case favor breaking up the company.
- The mediation talks began late last year under the supervision
of Judge Richard Posner, chief of the United States Court of Appeals for
the Seventh Circuit, who is acting in a private capacity.
- U.S. District Court Judge Thomas Penfield Jackson --
who is trying the case in Washington -- asked Posner to step in to mediate
in the case after earlier attempts failed. The settlement talks began after
Jackson found in early November, 1999, that Microsoft used monopoly power
to harm consumers, competitors and other companies.
- USA Today reported earlier on Wednesday that the government
favored a breakup of the company, giving specifics of the way the company
would be restructured.
- A Justice Department spokeswoman said the USA Today report
was inaccurate, without elaborating. ``The story is inaccurate in several
important respects,'' the spokeswoman said. ``It does not accurately represent
- Others familiar with the case said USA Today was correct
in saying the government favored breaking up the company but incorrect
in the way it characterized how the government wants the company to be
- Another Justice Department official said: ``The Justice
Department will not discuss any aspect of the mediation process.''
- A spokesman for Iowa Attorney General Tom Miller, who
is leading the state's efforts in the case, said: ``We have not commented
at all in this period where the judge has ordered mediation. We are not
- At a meeting in Jackson's chambers in Washington before
the settlement talks began, Judge Jackson expressed concern about news
reports that the states and the Justice Department were unable to agree.
- People familiar with the talks in Chicago said there
did not appear to be significant disagreement now between the states and
the Justice Department in the negotiations.
- A spokesman for Microsoft declined to comment on the
- ``We're not going to speculate on what the government
may or may not be thinking,'' said Microsoft spokesman Mark Murray. ''We
think it's completely inappropriate and counterproductive for anyone to
be discussing the confidential mediation process.''
- Murray said: ``Without commenting on mediation, we think
any talk of breaking up Microsoft is completely unwarranted. There's nothing
in this case that would support such a step.''
- At this point in the case, the two sides are arguing
over whether Judge Jackson's findings of fact show that Microsoft broke
the nation's antitrust laws.
- The government has already submitted a brief arguing
that the findings prove Microsoft did break the law. Microsoft replies
on Jan. 18, with further filings by the two sides on Jan. 25 and Feb. 1.
- Jackson will hear oral arguments on Feb. 22. If he does
find Microsoft broke the law, then he will likely hold yet another phase
of the trial to determine remedies.