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Microsoft settlement hazy
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August 20, 2001: 11:29 a.m. ET
Court's rebuke likely to push software maker toward a deal
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NEW YORK (CNNfn) - With Microsoft's four-year-old antitrust case due to be returned to a federal court in Washington later this week, trial watchers expect the software leader to re-double its efforts to settle the matter out of court.
But the road toward a settlement is by no means clear.
"I think they'll do a deal," Leonard Orland, a law professor at the University of Connecticut, told CNNfn's The N.E.W. Show.
"The question is not, 'Will they do a deal?' but, 'What will the terms of the deal be?'" Orland added.
On Friday, the U.S. Court of Appeals for the District of Columbia, which in June overturned a lower court's order that Microsoft be broken into two companies as a remedy for anticompetitive practices, denied the company's request that further proceedings in the case be delayed pending its request for a Supreme Court review.
The appeals court had ordered the U.S. District Court in Washington to assign the case to a new judge and re-examine the remedy as well as a few other elements of the original order. However, the appeals court upheld the lower court's ruling that Microsoft holds a monopoly in computer operating systems and used that monopoly power to engage in illegal, anticompetitive business practices.
Barring intervention by the Supreme Court, the district court is expected to randomly assign the case to one of as many as 14 judges as early as this week. The Supreme Court is not expected to decide whether it will take up Microsoft's appeal until early October.
Some antitrust experts have said that if the case were returned to the district court, they believe the Justice Department and some of the states that prosecuted Microsoft may be emboldened to seek a court order blocking the release of Windows XP, its newest operating system.
Windows XP, due for release Oct. 25, incorporates features such as instant messaging, streaming media and digital imaging capabilities into the operating system, and has been targeted by Microsoft's rivals, who say it demonstrates further anticompetitive practices.
Since the appeals court first handed down its ruling in the case in June, Microsoft repeatedly has expressed its willingness to settle the case out of court. And while none of the parties involved has acknowledged them, there reportedly have been some discussions toward that end.
The University of Connecticut's Orland said the attorneys general of some of the 17 states that still are pursuing the case against Microsoft could stand in the way of a settlement. New Mexico has dropped out of the suit, settling with the software maker earlier this summer.
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"The unpredictable factor is not Microsoft or the Justice Department," Orland said. "The unpredictable factor is a number of state attorneys general who are in this and have their own political agendas."
One of them, Connecticut's Richard Blumenthal, who has been among the most critical of the company's plans for Windows XP, has taken a hard line with respect to the terms of a negotiated settlement.
"We need to develop a strategy that offers consumers the most immediate kind of remedy to the monopolistic power that Microsoft has misused, and to prevent Microsoft from repeating what seems to be the same kind of misconduct," Blumenthal told CNNfn.
Paul Rothstein, a Georgetown University law professor, told the Wall Street Journal the appeals court possibly was "trying to position things for a settlement" when it rejected the stay and rebuked Microsoft for having "misconstrued" its decision setting aside the breakup order.
"I think they felt that Microsoft may have been thinking they got a lot out of the Court of Appeals decision, and that could lead a party to demand a lot in a settlement," Rothstein told the Journal. "I think they wanted to put a light damper on that."
The Justice Department has declined to comment on any negotiations, but last week said it was "pleased with the court's decision" and looks forward to the proceedings in the district court." 
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