Microsoft Settlement Talk Grows

Will the Microsoft monopoly case end not with a bang but a whimper?

That's the way it would look if several influential members of Congress have their way.

Following the federal appellate court ruling that saved the software Goliath from a court-ordered break-up — at least for now — politicians from both major political parties are urging the Bush administration to seek a settlement.

They're pressing for a negotiated end to one of history's biggest antitrust cases, even as Microsoft goes ahead with new software that bundles its features.

"Let's hope that we can put this lawsuit behind us," implored House Speaker Dennis Hastert, R-Ill.

Hopefully the ruling "will cause the parties, and the court, to go back and see if they can come up with an appropriate, sensible agreement,"  House minority leader Dick Gephardt, D-Mo., said.

The idea certainly appealed to Microsoft chairman Bill Gates.

"It's absolutely worth making an effort there," he said of a settlement.

In a unanimous decision Thursday, the U.S. Court of Appeals for the District of Columbia Circuit set aside an order breaking the company in two for antitrust violations. The judges, however, agreed that the company had abused its monopoly position in violation of antitrust laws.

The appeals court narrowed some of the findings of violations and sent it to a new trial judge, who must decide whether a breakup or some other penalty is warranted for Microsoft.

At this point, the Justice Department could appeal the appellate decision to the Supreme Court, work out a settlement or ask the new judge taking over the case to impose penalties on Microsoft.

The winds seem to favor the second option. Attorneys general from some of the 19 states that sued Microsoft said they would be open to settlement. The White House also hinted that President Bush preferred an out-of-court solution.

"The president believes people should work hard to enter into agreements and the president believes there's too much litigation in our society generally speaking," White House press secretary Ari Fleischer said.

The appellate judges based their decision in part on outside statements by U.S. District Judge Thomas Penfield Jackson that criticized Microsoft and founder Bill Gates as arrogant. The appeals court said those comments "seriously tainted" the four-year case.

Jackson's derogatory comments about Microsoft, made to several reporters and chronicled in books, included calling Gates "Napoleonic" and likening the company to a drug-dealing street gang.

In his ruling, Jackson concluded Microsoft improperly dominated the Internet browser market and should not have bundled its Windows operating system with its Web browser because it illegally disadvantaged competitors.

The appeals court, however, reversed the finding about Internet market dominance and said the new judge will have to reconsider whether tying pieces of software together harms consumers.

To Microsoft's delight, it warned against stifling innovation.

Gates the ruling as his company pressed ahead undeterred with its new Windows XP operating system and Internet services with a promise to continue innovation.

"Every company must have the ability to innovate and improve its products," the world's richest man said from the company's Redmond, Wash., headquarters

Though the breakup they sought was reversed, state attorneys general found victory in the conclusion of the court that Microsoft had violated the law. They pledged to continue the case vigorously, with or without the Justice Department.

"Our continuing duty is to fight for a fair and open marketplace," said California Attorney General Bill Lockyer, "either by settlement ... or litigation."

The Associated Press contributed to this report