The government is investigating whether Microsoft Corp. has used its market muscle to force even Intel Corp., its only real peer in the personal computing industry, to shelve new technology efforts that conflicted with Microsoft's ambitions.
Federal and state investigators appear particularly interested in an August 1995 meeting between Intel executives, including Chairman Andrew Grove, and Microsoft executives, led by Chairman Bill Gates, at which Gates made "vague threats" about supporting Intel competitors, according to one of many internal Intel memos that the company was required to hand over to investigators.
Gates, according to a memo written by an Intel executive who attended the meeting, was "livid" about Intel's "investments in the Internet and wanted them stopped."
In the last few weeks, federal and state investigators have been taking depositions from Grove and three other Intel employees, people close to the inquiry said. The investigators are pursuing additional evidence that might be included in the sweeping antitrust case against Microsoft filed by the Justice Department and 20 states.
The federal government and the states accuse Microsoft of using unfair business practices to protect its monopoly in operating systems and to extend that monopoly into the new markets for Internet software and commerce. The case, scheduled to go to trial Sept. 23, focuses mainly on Microsoft's tactics in the market for browsing software for navigating the World Wide Web.
The Intel employees' depositions could strengthen the case if the evidence suggests a pattern of Microsoft's abusing its monopoly power. The Justice Department and the states say that, in addition to thwarting competition, Microsoft has the ability to control the pace of innovation in computing -- the focus of the investigation of Microsoft's dealings with Intel.
Microsoft says the antitrust suit is misguided and that the company is a champion of innovation, enriching not only itself but much of the high-technology economy and benefiting consumers.
The Justice Department would not comment on its investigation of Microsoft.
The August 1995 meeting came only weeks before the introduction of Windows 95. Microsoft already was well along in its plans for the Internet, though it would not announce them until December 1995. None too soon, for by early August 1995, Netscape Communications Corp., the pioneer in browser software, was a hot start-up about to sell shares to the public, setting off an Internet mania on Wall Street.
