Microsoft Lawyers Should Stay Busy Back To Court In 2002 Company did settle two high-profile cases, but it faces other legal troubles.(INTERNET & TECHNOLOGY)

Byline: PATRICK SEITZ

Microsoft Corp.'s legal problems aren't expected to end soon, despite settlements reached in two high-profile cases.

The software company that Wall Street admires and rivals fear closed out 2001 with an amazing legal turnabout. It started the year facing the prospect of being split in two for antitrust violations. Microsoft also was wrestling with a host of other lawsuits and investigations.

But now the Redmond, Wash., company is on the verge of settling its antitrust case with the Justice Department and a class-action price-gouging case in a federal court. Both proposed settlements likely will be modified before the courts will accept them, analysts say.

"It looks good (for Microsoft), but looks can be deceiving," said Rob Enderle, an analyst with Giga Information Group.

Microsoft is still under investigation by the European Commission, and that's a "big cloud" over the company, Enderle says. The EC is probing claims that Microsoft failed to disclose information competitors needed to interoperate fully with its operating systems for personal computers and servers, and that it engaged in discriminatory licensing of its technology.

The European inquiry is serious because it could result in hefty fines. If the EC rules against Microsoft, the regulatory body could slap the company with a fine of up to 10% of its annual revenue, or about $2.5 billion.