Originally created 05/07/00

Microsoft settlement predicted



SEATTLE -- Some antitrust experts predict the Justice Department won't settle its landmark case against Microsoft Corp. until President Clinton leaves office.

The predictions were made by Microsoft legal consultant C. Boyden Gray, who served as an aide to Presidents Reagan and Bush, and Nicholas Economides, dean of New York University's Stern School of Business, at an NYU legal conference on the case held late last week.

"I think the likelihood is that it will be settled," Gray said -- but after the November election. The Justice Department would be "more the same with Gore, but there would be a change. Any administration is going to put new people in."

Economides predicted an appeals court would overturn the trial court's finding that Microsoft illegally tied its Internet Explorer Web browser to its Windows operating system.

The weakened case would be settled under Al Gore or George W. Bush, he said -- but not Clinton. "I think the current administration would have a hard time settling," he said.

Microsoft's legal fees would reach $6 billion by that time, Economides said, and the lengthy legal battle would leave the company unable to make acquisitions it might otherwise pursue over the next two years.

If Bush is elected, his antitrust enforcers would likely bring a less impassioned approach, Economides said.

"But I wouldn't be surprised if Gore cut a deal as well," he said. "His incentive would be: `It's an old case, we inherited it -- let's come up with a solution everyone can be happy with."'

GOP front-runner Bush has criticized Justice Department handling of the case, saying he hopes government lawyers don't ruin the nation's largest software maker. But a spokesman for Bush declined to say whether Bush would side with Microsoft if he were elected.

The government late last month outlined its proposal to halve the company -- into one selling the Windows operating system and another selling software applications. Microsoft is scheduled to present its own proposal Wednesday.