Bill Gates says he would like to settle

As the U.S. Justice Department stepped up efforts to have severe penalties imposed upon Microsoft following its decisive court victory in having the software giant declared a monopoly, Microsoft chairman Bill Gates told his company’s shareholders he wants to work out a settlement. Microsoft is willing "to go a long way" to settle the landmark antitrust case, Gates said. A week after Federal Judge Thomas Penfield Jackson declared Microsoft to be a monopoly in a strongly-worded 207-page Findings of Fact" ruling, Microsoft continues to vehemently deny the accusation.

In Washington DC, Justice Department officials indicated that the strength of the court’s "Findings of Fact" report on Microsoft’s monopoly power, is now clearing the way for the government to seek severe penalties for Microsoft, including forcing the company to split its Internet and applications business.

Especially aggressive in seeking radical limitations on Microsoft’s ability to wield power in the computer market are the 19 state attorney generals who joined the antitrust lawsuit. "We are in position to get a rather dramatic remedy. And it is the overwhelming opinion now that we have to address their monopoly in operating systems software," said Elliot Spitzer, Attorney General for the state of New York.

At Microsoft, the 2,000-plus shareholders gave Gates a standing ovation. After one shareholder told Gates the legal ruling was "humiliating," Gates said he believes the company’s legal team would be able to win the case on appeal. "I still believe that the American legal system at the end of the day will recognize that Microsoft's innovations and behavior were completely fair and brought tremendous benefits to millions of consumers," Gates said.

Gates said that while Microsoft is willing to discuss a settlement, the company would not negotiate Internet Explorer out of Windows 98. "We're willing to go a long way to address the government's concerns, but if we can't add Internet support, we can't add any new features. If we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand is meaningless. One of the most defensible things we've ever done is to support the Internet in our operating system, We cannot back off on that. When your own government decides they're going to take you to court and say that you shouldn't make those kinds of advances, it's not going to be a pleasant experience." That statement means Microsoft remains strongly opposed to any effort to reign in its control over the desktop and computer makers who ship the firm’s operating system with their hardware. Neither is Microsoft considering any break-up suggestions. Chief Operating Officer Bob Herbold said he had seen nothing in Jackson's findings to justify such as drastic remedy. Analysts said with the exclusion of the there two major areas of redress there isn’t a lot left which the government can work with and that spells almost certain doom for the negotiation efforts.

Government lawyers said Microsoft was using the shareholders meeting to sway public opinion in violation of an earlier agreement not to discuss negotiations in public. "If there are ever to be fruitful settlement discussions all parties must refrain from spinning their positions in public," said one government lawyer.