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Microsoft, Justice Department face new judge

Updated:

WASHINGTON (AP) _ The new judge in the Microsoft antitrust case on Friday ordered both sides to participate in intensive negotiations to settle the four-year legal battle. ``There's no reason this case can't be settled,'' the judge said.

U.S. District Judge Colleen Kollar-Kotelly gave the Justice Department and Microsoft until Nov. 2 to reach a deal. She asked both sides to negotiate ''24 hours a day, seven days a week.''

The judge, who inherited the case this summer after an appeals court threw out an earlier judgment breaking the company in two, made clear several times she thought the case should be settled.

``I believe this case should be settled,'' she said at the outset of a scheduling conference. Later she added, ``If everyone is reasonable and acts in good faith, there is no reason this case can't be settled.''

If settlement talks fail, the judge set a schedule for new court proceedings to determine what penalty Microsoft should face for violating antitrust laws.

The government has made clear it no longer intends to seek a break up of Microsoft, opting for lesser penalties that include restrictions on Microsoft's business practices.

The two sides have been participating in some settlement discussions, but little progress has been reported. Some meetings were scuttled after the Sept. 11 terrorist attacks in Washington and New York.

Microsoft added a new lawyer to its team this week, Dan K. Webb of the Chicago firm Winston & Strawn. While working for the government, Webb prosecuted Adm. John Poindexter in the Iran-Contra scandal.

In private practice, Webb defended the tobacco industry in liability cases and General Electric in a diamond price-fixing trial.

Webb will face another top Chicago lawyer, Philip Beck, whom the Justice Department tapped this summer to be their main trial attorney. Beck was one of President Bush's advocates during the Florida election recount.

Kollar-Kotelly received the case after a federal appeals court threw out Judge Thomas Penfield Jackson's order to split up the firm, but upheld key portions of the antitrust case. The appeals court found that Microsoft hurt competition and lessened consumer choice.

Jackson was removed from the case after making derogatory comments to reporters about Microsoft's executives and lawyers.

In the past week, several consumer groups and six state attorneys general not associated with the case lent their support to prosecutors. They said Windows XP, Microsoft's upcoming operating system upgrade, would hurt consumers.

Microsoft has long argued that it is only adding new features that consumers want, saying attacks are fueled by the company's rivals.

Microsoft is fighting the monopolist charge on another front as well. In early October, the Supreme Court will decide whether it will take up the historic antitrust case, although legal experts said it is unlikely.
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