Ballmer E-Mails Employees About Suit

Microsoft CEO Steve Ballmer told employees that Microsoft continues to submit last-minute proposals for settlement of its antitrust case, but that an appeal of the judge's decision is still on the table.

In a March 27 E-mail to thousands of Microsoft employees, Ballmer dismissed many reports in the press as "largely inaccurate," and said Microsoft chairman Bill Gates and other company executives are "focused on these efforts."

Ballmer said the case has not been settled and the Department of Justice has not viewed Microsoft's proposals as "inadequate." In fact, Ballmer said, Microsoft has offered more concessions than what he believes a court judgment would impose if the company lost on appeal.

"What is true is that we are still in talks with the government," Ballmer wrote. "We have made, and will continue to make, substantial proposals to settle this case. While we're very sure of our legal position and we're prepared to take it all the way on appeal, we've learned that discretion is the better part of valor, so we are working very hard to resolve the case through settlement."

The letter does not specify the "substantial proposals" Microsoft has put on the table. Newspaper reports indicate Microsoft has offered a number of things, from opening the Windows APIs to unbundling the Internet Explorer browser from Windows.

Ballmer said Microsoft stands behind its right to innovate. "Any settlement must preserve our ability to innovate and improve our products," he said.

Earlier this week, Judge Thomas Penfield Jackson reportedly told both sides he would delay issuing his verdict as long as the end of next week to give both parties more time to settle the case. If they settle, Jackson wouldn't rule in the case.

Even if Jackson issues his conclusions of law, Microsoft and the Justice Department still have the chance to settle afterward, say legal experts. But it's clearly to Microsoft's advantage to reach an accord before the verdict arrives, says George Priest, a Yale University law professor.

"Even if a settlement supercedes the verdict, it's still on the books," Priest says. "Certainly, it's bad press" for Microsoft. And if numerous class-action lawsuits filed against Microsoft were to reach a jury trial in the wake of any settlement, Jackson's conclusions of law could still be introduced as evidence, Priest says.