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Morning News

Does Judge's Delay in Ruling Mean Microsoft and the Government are Close to a Settlement?

Aired March 28, 2000 - 9:40 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BILL HEMMER, CNN ANCHOR: Now to Microsoft. The federal judge in the Microsoft antitrust case has been expected to issue a verdict today, but the computer giant's 11th-hour attempt this past weekend to reach a settlement with the government could delay the ruling. The Justice Department has been talking about Microsoft's 10-page proposal with lawyers from the 19 states that have joined the government as plaintiffs in the case. The judge has already signaled that he will rule against Microsoft if the two sides do not reach a settlement.

For more on the case, where it stands now and where it may be headed, Elizabeth Wasserman live in Washington, the Washington editor of "The Industry Standard," and has covered the Microsoft trial from the beginning. It's been a big one.

Elizabeth, good morning to you?

ELIZABETH WASSERMAN, "THE INDUSTRY STANDARD": Good morning.

HEMMER: Liz, pick this issue up on the judge's findings that may be postponed today. Is that an indication possibly that Microsoft's offer might be tendered at this time, may be looked offer and possibly there is some wiggle room on this?

WASSERMAN: Well, certainly while there's no official word from the judge's chambers yet, if I had to put money on it I'd bet that we're looking at a short-term postponement. And there are three reasons why.

The offer that Microsoft made Friday was very technical. It took a while for government officials to sort out and at least seems to go -- seems to represent a significant concession for the company and significant steps forward.

There are two other reasons as well. While the government's -- while the company's position is clear, on the other side you're dealing with several different governments. You're dealing with the Justice Department and also 19 different states. It's not clear that they're all on the same page as far as what they're looking for in a potential settlement or in some type of court remedy.

The third reason is, you know, the judge himself, if you recall back in November when he issued his first findings of fact in the case, he gave the public about two weeks notice and took [pains to be aware of the impact this might have on gave financial markets. He issued his ruling on a Friday afternoon after markets had closed and gave people enough time to read the decision either online or if they had ordered print copies in order to make informed decision about whether they'd buy and sell come Monday morning.

HEMMER: You've established some very good points on this case. Let me dissect one other.

WASSERMAN: Sure.

HEMMER: It appeared for a long time that the U.S. government was only going to be content if Microsoft was indeed broken up. Does it appear that they've softened that stance?

WASSERMAN: Yes, it appears that the Justice Department certainly has. There are apparently a couple of states that are still under the belief that a court -- a court ruling and a court remedy and perhaps a breakup would go further to solving the problem on a more permanent basis.

The problem with the conduct remedies that Microsoft has proposed -- has apparently proposed in this settlement lie with continued enforcement. How would they have oversight over this conduct? Would the court have oversight? Would the government have to have oversight? Would some sort of independent standard body have to have oversight? So there are key questions about the enforceability.

HEMMER: And extremely complicated matters as well. In the short time that we have left, you've watched this trial from the very beginning in Washington. Do you have a feeling for the potential outcome?

WASSERMAN: I think the judge played his hand. If he has the final word in this case, I think it's going to be a pretty harsh ruling. I think he's going to find that Microsoft violated antitrust law.

However, I think it's in the interest of both sides to really come to some sort of settlement out of court so that -- a settlement that they all can live with, that the government van live with from the enforceability aspect, that the company can live with from a business aspect...

HEMMER: OK.

WASSERMAN: ... and then continue to do business.

HEMMER: All right, we could talk about this for a whole long time, but we are out of time. My regrets.

Elizabeth Wasserman, "Industry Standard," live in Washington, thank you again.

WASSERMAN: Thank you.

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