How The Microsoft Pact Nearly Crashed

Justice Dept. trustbuster Anne Bingaman has won acclaim for her judicious settlement with Microsoft, ending its alleged anticompetitive activities without hamstringing its world-class operations. But antitrust targets are learning the scrappy litigator can be far from judicious in the midst of battle. People close to the talks say her angry outburst nearly scuttled the accord at the last minute.

As agreement seemed near in the wee hours of July 15 in Washington, Bingaman demanded that the company commit to a settlement. But Microsoft lawyers wanted to give Chairman William Gates, then in Idaho, a chance to review it later that morning. On the phone to Gates, Bingaman threatened to sue Microsoft if he didn't sign. When Gates insisted on more time, Bingaman stopped the talks at 3 a.m. "I said: `We're through,"' she says. "You'd have to be out of your mind to negotiate twice." Bingaman, who denies she lost her temper, later restarted the process. Gates got enough time to go over everything, and both parties signed the final papers. Bingaman says she doesn't regret her actions, which she deems justifiable.

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