Negotiations between Microsoft, the US Department of Justice and a number of state attorneys general broke down on Saturday. Both the federal authority and up to 20 states are expected to file antitrust suits against the software company on Monday.
"This impasse is disappointing," said Microsoft chairman Bill Gates in a statement released on Saturday. ?We worked hard to try and resolve this, but the government demands went too far with no basis in law and, most important, were not in the best interest of consumers.?
Microsoft claims the DoJ, among other things, demanded that Microsoft should include Netscape Navigator with Windows 98. ?Government demands went too far and appeared to be in the interest of a single competitor, not consumers," the statement reads.
It goes on to say the expected suits are ?without merit and would hurt consumers and the American software industry?.
On Thursday, Microsoft managed to hold off the lawsuits by offering a number of concessions in last ditch negotiations. The company agreed to delay the shipment of Windows 98 to PC manufacturers, while still maintaining a 25 June ship date to end users.
Representatives of Microsoft, the DoJ and the states started face-to-face negotiations in Washington on Friday. The negotiators were said to include Microsoft?s chief lawyer William Neukom and assistant attorney general Joel Klein.
According to some press reports, Microsoft offered to make its contracts with PC manufacturers and other partners less restrictive. But the statement that Microsoft issued on Saturday suggests that neither party has really budged from its entrenched position - with Microsoft still claiming its right to ?innovate? while the government appears chiefly concerned with which logos and icons are shown when Windows boots up.
A document filed with the Securities and Exchange Commission (SEC) on Friday revealed that Microsoft expects a lawsuit to result if no agreement can be reached, but also suggests that the company still does not believe such a suit would have a serious impact.
In its 10-Q form, a legally required quarterly report on a company?s financial situation, Microsoft refers to the negotiations, stating: ?The parties are currently exploring whether a negotiated resolution can be reached. If it cannot, management believes it is likely that a lawsuit will be filed, but it is impossible at this time to determine its scope or outcome. We do not believe such an action would include significant claims for damages against Microsoft.?
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