Judge Richard Posner is about to undertake one of the most daunting challenges of his remarkable career: Eking out a settlement between Microsoft and government antitrust officials.
Both sides are meeting Tuesday with Posner behind closed doors in Chicago to see if they can settle the ongoing antitrust lawsuit.
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Previous talks – including a marathon session the week before the Justice Department and state governments filed the case in spring 1998 – have gone nowhere.
Posner, chief judge of the US Court of Appeals for the 7th Circuit, is a well-respected expert on antitrust regulation and prolific author who writes approximately one book a year.
"We would be better off without trying to regulate natural monopolies," Posner wrote in a preface to the new 30th anniversary edition of Natural Monopoly and its Regulation.
The book – like other publications by members of the so-called Chicago School of economics – argues that the evils of monopoly are exaggerated and the costs of government oversight more substantial than might first appear.
That's uncomfortably free-market for some fans of regulation.
"Given his voluminous antagonism to government regulation, it is not likely that Judge Posner will nudge his sparring parties toward 'conduct' changes by Microsoft that need regulatory oversight," complained Ralph Nader, who said that he would prefer that the lawyers resolve their differences in court instead.
But unlike some economists, Posner is not opposed to all antitrust laws, and has sided with regulators in the past.
Posner this month agreed to attempt to mediate the case at the request of US District Court Judge Thomas Penfield Jackson in Washington, who is trying the case.
Posner will not be able to force a settlement and can only nudge both sides towards agreement.
"Expectations should run low for this first meeting," said William Baer, who until recently headed the Bureau of Competition for the Federal Trade Commission. "This is likely to be preliminary and focused on establishing the rules of engagement."
As his starting point, Posner will have Jackson's 207-page findings of fact released earlier this month.
Jackson found that Microsoft abused monopoly power in the Windows operating system, using it to harm consumers, rivals, and other companies. Jackson has yet to conclude whether those actions violated the nation's antitrust laws, a decision that is expected in February after further written and oral arguments.
No one knows what the two sides may agree on as a remedy. But neither the states nor the federal government have sought any fine or other financial settlement from Microsoft.
However, Microsoft faces a deluge of consumer class-action lawsuits that demand large amounts of money for overcharges that Jackson found had occurred.
If there is a settlement, according to an antitrust expert who asked not to be identified by name, the citizens of states which settle might be deprived of their right to sue.
"The states can give up potential claims for money damages and in the process they will also be giving up the money damages claims of citizens within their states," said the lawyer, who added that citizens of states other than the 19 involved would still be able to sue.
Reuters contributed to this report.
