Microsoft agreement reported

By Ted Bridis and D. Ian Hopper
Associated Press

WASHINGTON — Microsoft Corp. and the Justice Department reached a tentative agreement yesterday to settle the antitrust case against the software giant, and state attorneys general are reviewing terms of the deal, according to people familiar with the talks.

Terms of the prospective settlement were kept under wraps, and people close to the negotiations cautioned that precise language was still being worked out.

The attorneys general from the states that sued Microsoft for antitrust violations were weighing whether to sign onto the deal, the sources said.

Charles James, assistant U.S. attorney for antitrust, disclosed the agreement to the attorneys general yesterday and said Microsoft also would accept the terms, the sources said, speaking only on condition of anonymity.

The computer industry has eagerly been monitoring the talks, looking for a possible settlement and hoping it would combine with the release of Microsoft's new Windows XP operating system to invigorate the lagging industry.

The new trial judge, U.S. District Judge Colleen Kollar-Kotelly has set a deadline tomorrow for a settlement.

At the Justice Department, spokeswoman Mindy Tucker declined to comment on the talks.

One person who had been briefed on some of the draft settlement proposals being discussed in recent days, who spoke on condition of anonymity, said the ideas being discussed included:

• Letting Microsoft add new features into its flagship Windows software, but requiring the company to also offer a version that doesn't include those additions.

• Banning restrictive contracts that would force computer makers to buy versions of Windows with new features, but allowing financial incentives such as discounts to make those versions more enticing.

• Forcing Microsoft to reveal parts of its Windows blueprints relating to its Internet browser software, but not the blueprints to Windows.