Microsoft, U.S. to talk

September 28, 2001 Posted: 1602 GMT

NEW YORK (CNNfn) -- The federal judge presiding over the next phase of Microsoft's antitrust case Friday ordered the software maker and the U.S. Justice Department into five weeks of intensive settlement talks.

During the first appearance before U.S. District Court Judge Colleen Kollar-Kotelly, she told attorneys for Microsoft and the Justice Department that now is an "optimal time" to settle the case out of court and that they could strike a deal "if everybody is reasonable and acting in good faith."

Kollar-Kotelly said such settlement talks should proceed "24 hours a day, seven days a week," and set a deadline of Nov. 2.

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If there is no settlement by then, Kollar-Kotelly said a hearing on what steps to take to curb Microsoft's abuses of antitrust law would start in March 2002. The judge ordered an expedited schedule, much faster than the one Microsoft had proposed earlier this month.

Kollar-Kotelly made it clear that she disagrees with Microsoft's contention that she has limited power to impose remedies on Microsoft's conduct, saying Supreme Court rulings clear the way for her to do whatever is necessary to prevent not just past violations but also future violations of the law.

After the order, the Microsoft legal team left the court house quickly without comment.

On June 28, the U.S. Court of Appeals for the District of Columbia overturned a lower court's ruling that Microsoft be broken into two companies as a remedy for anticompetitive practices and remanded other parts of the judge's decision back to the lower court for consideration by a different judge.

Click here for CNNfn.com's special report: Microsoft on trial

At the same time, the appeals court upheld the lower court's conclusion that Microsoft had a monopoly in the market for computer operating systems and maintained that monopoly illegally.

Kollar-Kotelly was assigned to the case because the appeals court deemed Judge Thomas Penfield Jackson, the original trial judge, had violated ethical guidelines by making certain comments about the case publicly.

Microsoft (MSFT: up $0.21 to $50.17, Research, Estimates) shares were modestly higher in late morning Nasdaq trade Friday.

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