Microsoft And Justice: Working It Out?

Microsoft's lawyers are talking to the Justice Dept., government sources say--and that raises the possibility of settling the feds' 11-month antitrust probe of the software powerhouse.

The sources are coy about exactly what's on the table. One official says the usual intent of such talks is "to work things out." Still, the sources warn that, since the two sides disagree in many areas, the exercise may go nowhere. Microsoft would not comment beyond saying it is still cooperating.

Justice attorneys in late June deposed top Microsoft officials, including Chairman Bill Gates, sources close to the probe say. This indicates that Justice lawyers are near to deciding whether to recommend that the department sue and on what charges.

Justice has been pursuing a broad case on Microsoft's use of its operating-systems dominance to extend control to applications. One recent episode sparking the government's interest: Microsoft's so-called nondisclosure agreements on Chicago, its upcoming Windows product. The agreement barred customers that get early versions of Chicago from working with competitors. In April, Microsoft agreed to loosen the restrictions on WordPerfect.

If current talks between Justice and Microsoft end in a hopeless deadlock, the government may go ahead with civil charges. "If we're at the end of the road with them, we'll file suit," says a government source. "But we're not there yet."

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