Investigation of Microsoft broadens

June 22, 1995|By New York Times News Service

The Justice Department has broadened its investigation of Microsoft Corp.'s plans for its new on-line network, issuing subpoenas this week to publishers, broadcasters and others who have signed up to be on it.

The requests for documents from the information suppliers of the on-line service, Microsoft Network, signal a second step in the investigation.

Two weeks ago, the Justice Department issued civil investigative demands -- the equivalent of subpoenas -- to Microsoft's rivals in the on-line business, including America Online Inc., H&R Block's Compuserve and Prodigy Services, the joint venture by IBM and Sears, Roebuck & Co.

In the new round of requests, the information suppliers for Microsoft Network are being asked for any documents received after July 1993, written by either suppliers or by Microsoft, that relate to estimates of how many people will sign up for Microsoft Network.

Microsoft intends to place the access software for its on-line serv

ice on the company's new operating system, Windows 95, which is scheduled to go on sale in August.

The Justice Department is looking into whether this practice, called bundling, gives Microsoft an unfair advantage over rivals in the small but fast-growing market for on-line services.

The Justice Department seems to be looking for documents thatmight show Microsoft plans to use its dominance of the operating system market -- roughly 85 percent of personal computers run its software -- to dominate the on-line business as well.

The civilian investigative demand, which one recipient company made available to the New York Times, states that "because of the urgency of this investigation, the CID sets a return date for this information of Friday, June 23." That is an extremely short timetable to respond to such a request, lawyers said.

Among other things, the Justice Department demand seeks estimates of how many people will sign up for Microsoft Network for each year from 1995 through 1998 and its expected impact on rival on-line services.

The government order also asks for any document that deals with the expected impact of Microsoft's entry into the on-line business.

Microsoft's competitors and some economists argue that the giant software company's control of operating system software could curb competition and innovation as it moves into new, related fields.

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