REDMOND, Wash. -- April 3, 2000 -- Microsoft Chairman Bill Gates today said that he and team of top company executives worked for the last four months in an attempt to achieve "a fair and reasonable settlement" of the antitrust case with the Department of Justice and various states.

"We went the extra mile to resolve this case, but the government would not agree to a fair and reasonable settlement that would have resolved this case in the best interests of consumers and the industry," Gates said.

Gates said that he had personally devoted hundreds of hours to the settlement process. He also said that the Microsoft mediation team, composed of senior executives and lawyers, had devoted more than 3,000 hours to the settlement effort over four months of intense negotiations.

"Obviously, we are not going to discuss the confidential mediation process," said Gates. "But I can say that Microsoft offered significant concessions in the interest of ending this case. Ultimately, it became impossible to settle because the Department of Justice and the states were not working together. Between them, they appeared to be demanding either a breakup of our company or other extreme concessions that go far beyond the issues raised in the lawsuit."

Microsoft entered into settlement discussions with the DOJ and states in late 1999, after U.S. District Court Judge Thomas Penfield Jackson proposed a process mediated by Seventh Circuit Court of Appeals Chief Judge Richard Posner. The talks continued until Judge Posner announced today that the parties had negotiated to an impasse.

"Bill and I and our entire executive team invested countless hours in the mediation process, because we believe that a settlement would be good for everyone," said Microsoft President and Chief Executive Officer Steve Ballmer. "We continue to believe that we have a strong legal case, and that the judicial system will ultimately rule in our favor. We would prefer to resolve this case through settlement, but we must protect our right to bring the best products for consumers to the fast-changing marketplace."

Both Gates and Ballmer had high praise for the efforts and professionalism of Judge Posner.

"Judge Posner deserves a lot of credit for his incredible effort, insights and tenacity throughout this process. Judge Posner did everything he possibly could, and then some," Gates said.

• Judge Richard Posner statement issued Saturday, April 1, 2000.