MICROSOFT WANTS "COMMON SENSE" SETTLEMENT.

Microsoft advised the Department of Justice that any breakup of its business would be fatal, but indicated that it would accept reasonable restrictions on its conduct in order to settle the government's antitrust claims.

Having previously argued that since it is not a monopoly it should not be subject to any restrictions on its conduct, it is becoming more conciliatory as settlement talks continue. The secret discussions involving possible settlement of this antitrust case have taken place in Chicago beginning in December of 1999, under the mediation of Judge Richard Posner, a retired federal appeals court judge. Both sides in the discussion must return to litigation and closing arguments before Judge Thomas Penfield Jackson on February 22.

Capitol Hill has weighed in with comments by senior political persons to the effect that some accommodation should be reached that will restore competition to the industry but avoid Draconian impact on Microsoft. Microsoft's characterization of its recent offer as "substantial concessions" are apparently designed to be received favorably on Capitol Hill, with the resulting political leverage that could impact settlement discussions.