Back to court for Microsoft and DoJ

Opposing lawyers will get one last chance to make their best arguments to Judge Jackson in the "conclusion of law" phase of the landmark antitrust trial

It's back to Washington on Tuesday for Microsoft and the government, where lawyers for both sides will present their last arguments before the presiding judge hands down a final ruling in this landmark antitrust trial.

After Microsoft and government lawyers present their arguments about how they believe the law should be applied, it will be up to US District Judge Thomas Penfield Jackson to make the final ruling. He will then determine which antitrust laws, if any, Microsoft has violated.

If he rules in favour of the government, Jackson will then need to determine what action to take against Microsoft. If he rules against Microsoft, the software maker will immediately file an appeal.

Jackson, who has pushed the sides to reach an out-of-court settlement, ruled in a decision last autumn that he essentially agreed with all of the government's allegations against Microsoft being a predatory monopoly. But it is this next, so-called remedy, phase of the trial that has provided no small source of controversy.

Jackson could order Microsoft to change its business practices, but this so-called corrective measures approach would force the government into the role of hands-on regulator. Another possibility that's been rallied about would have the judge require Microsoft to disclose its source code. A third, more radical, step would be to break the software giant into three parts. Indeed, the US Justice Department is reportedly considering a proposal to divide Microsoft into smaller duplicate companies.

Jackson isn't likely to issue a ruling until he hears back from US Circuit Judge Richard Posner, who has agreed to serve as mediator. Sources say the talks, in which Posner meets separately with each side, have made little progress. Still, there is incentive for both parties to cut a deal.

A deal would help Microsoft avoid a potentially devastating remedy that could radically reshape the company forever. For the government, a deal would provide it with tangible results. Otherwise, the DoJ could face months -- if not years -- of litigation, as the inevitable appeal would wind its way through the court system.

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