FTC broadens investigation of Microsoft

April 13, 1991|By O. Casey Corr | O. Casey Corr,Seattle Times

SEATTLE -- The Federal Trade Commission's investigation of Microsoft Corp. has moved into far-reaching allegations that the company has monopolized operating systems for the nation's personal computers.

Microsoft, which earlier characterized the investigation as the FTC pursuing a curiosity, said yesterday that it now faces a broader investigation.

"Microsoft is surprised and disappointed that the inquiry has been broadened," said William Neukom, Microsoft vice president for law and corporate affairs. "We will continue to cooperate with this investigation. We believe that Microsoft has acted in a legal and ethical manner."

The FTC will not comment on any ongoing investigation.

Microsoft said that it did not know what specific allegations had led the FTC to broaden its review.

If the investigation turns up proof of wrongdoing, Microsoft could face fines or, at the extreme, pressure to split up the company, as AT&T was in the early 1980s.

The Seattle-area company now dominates the market for operating systems, the basic control systems for personal computers. It is also gaining in the market for applications, such as spreadsheets and word-processing programs.

Microsoft said it received notification Thursday that the FTC will examine third-party allegations that it "has monopolized or has attempted to monopolize the market for operating systems, operating environments, computer software and computer peripherals for personal computers."

"I'm not surprised," said Robert Kleiber, an analyst at Piper Jaffray & Hopwood in Seattle. "It certainly makes sense for the FTC to look at a broader picture of what's going on. It's our sense that the industry was not reluctant to give information to the government.

"Anytime the government starts nosing around, it is a troubling development," he said. "The government has the ability, power and inclination and has shown in the past in other industries that it is not adverse to meddling around."

Critics of Microsoft have long claimed that the software giant is manipulating the industry in order to crush smaller companies and hurt large rivals.

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