Joel Klein, celebrating his victory over Microsoft as head of the US government's anti-monopoly division, held out an olive branch yesterday by offering to restart settlement talks with the software group.
Speaking the day after Judge Thomas Penfield Jackson had agreed with the government that Microsoft should be broken up, Mr Klein said the government was "prepared to engage in meaningful settlement negotiations" to avoid an appeals process that could take a further two years.
He refused to say whether any settlement would be possible without an outright break-up of the company. Instead, he stressed that any settlement would depend on Microsoft's willingness to "live by the law" rather than "continue to abuse its monopoly power".
Settlement talks between the two sides broke down in April after Microsoft rejected any suggestion of a structural reorganisation.
In an interview with the Guardian yesterday, Brad Smith, general counsel for Microsoft, offered a guarded response to the settlement offer. "We have said constantly that we are always interested in any reasonable basis for this case to be settled."
However, he indicated the difficulty of both sides reaching such an agreement when he added that the group would not "compromise" on its belief that consumers were best served by Microsoft integrating new features to its operating system. The group could only do this as a unitary company, he said.
Judge Jackson also urged the two sides to start talking yesterday. In an interview with the Washington Post, he said the government and Microsoft should "swallow their own reluctance to compromise and reach a remedy that both sides, if not elated by, nevertheless are willing to extend".
Microsoft moved quickly to stay the judgment yesterday pending a full appeal, which is expected within days.
Jim Cullinan, a company spokesman, said Microsoft would appeal against the "entire order". Executives have said they are confident that the 25-year-old company would not be broken up.
Steve Ballmer, the company's president, said that the split-up order was unjust.
In his final judgment on the case, Judge Jackson called Microsoft untrustworthy. He said Microsoft might have avoided such a "radical" remedy as a break-up "had mediation been successful and terminated in a consent decree". His scathing indictment of the company suggested that it had no respect for the law, having failed to accept it had done anything wrong even after an earlier ruling that it had broken US anti-monopoly laws.
Mr Klein said it was telling that Microsoft had never set up an anti-monopoly compliance group after signing an earlier consent decree.
Analysts said it was too early to tell whether there would be a settlement. The justice department has filed for an appeal to go straight to the supreme court. If the court decides to accept the case, it could by settled next year.
