Microsoft calls suit 'perverse' Software giant asks court to throw out antitrust complaint


November 12, 1997|By BLOOMBERG NEWS

WASHINGTON -- Microsoft Corp. accused the Justice Department yesterday of launching a "perverse" effort to keep computer users from getting valuable technology, and urged a federal judge to throw out an antitrust complaint against the company.

Microsoft argued that a 1995 antitrust settlement gave the software company "unfettered freedom" to fold new features and functions -- such as Internet capability -- into its dominant Windows 95 program and other PC operating software.

"The government should be encouraging high-technology innovation instead of intruding into product design," said William Neukom, senior vice president and legal counsel for Microsoft. "Customers, markets and Microsoft should determine what is in our products, and not the government."

The world's top maker of personal computer software released a 3-inch stack of legal briefs and depositions challenging the Justice Department's accusation that Microsoft is using its near-monopoly on PC operating systems to compel computer manufacturers to install its Internet Explorer browser software, in violation of a 1995 consent decree between the company and the government.

Microsoft argued that, even before the negotiations that led to the settlement of earlier U.S. antitrust charges, the Justice Department knew about Microsoft's plans to integrate an Internet browser into its Windows 95 operating system -- yet did nothing until after the fourth version of its Internet Explorer program was released in late September.

Microsoft's filing scoffed at government accusations that fearful computer companies might not cooperate with the Justice Department investigation because of nondisclosure requirements in its licensing contracts.

"Plainly, none of Microsoft's vocal critics, who lambaste the company on a regular basis on any number of topics, is the slightest bit intimidated," Microsoft said.

The software company attached statements by top executives at computer makers Compaq Computer Corp., Packard Bell NEC Inc., and Dell Computer Corp. saying they put the Internet Explorer browser on their products because consumers want it.

Mal Ransom, senior vice president at Packard Bell, said Internet Explorer is "easier to use" and the company has "found that customer demand" for Netscape Communications Corp.'s Navigator browser "is not strong enough" to make it a part of the standard Packard Bell software package.

The Justice Department's complaint included testimony showing that Microsoft threatened to pull Compaq's license to use Windows 95 unless it featured Internet Explorer on its computers, and that Microsoft turned down requests by other computer makers who wanted to change the way Internet Explorer was installed.

The case centers on the Justice Department's charges that Internet Explorer has been marketed as a separate product from Windows 95. By forcing computer manufacturers to install both on their machines, the government says, Microsoft is violating a provision in the earlier antitrust settlement.

The 1995 accord, covering how Microsoft licenses its operating-system software, prohibits tying new products to Windows. But the consent decree allows Microsoft to develop xTC "integrated products," meaning that new features and innovations can be added to an improved operating system. The improved operating system was Windows 95.

From the start, Microsoft's defense has centered around its argument that Internet Explorer is an integral part of Windows, and not a free-standing product.

In its brief, filed with a Washington court late Monday and released yesterday, Microsoft argued that it ultimately is irrelevant whether Internet Explorer is offered as a separate product or a part of Windows 95. Microsoft said it is free, under the 1995 agreement, to put any kind of function into Windows 95 -- including features offered by free-standing software programs.

"The entire thrust of the [Justice Department's] argument is beside the point because there is no reason why a 'separate product' cannot also be part of an 'integrated product,' " Microsoft's brief said.

Pub Date: 11/12/97

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