Suits Against Microsoft Are Expected Today
The Justice Department plans to file a broad antitrust suit against Microsoft Corp. today that will seek to give computer makers more freedom to modify Microsoft’s controversial Windows 98 software rather than accept it as a fixed package.
The suit, outlined by government sources Wednesday, will be accompanied by a similar antitrust action against the giant software company to be filed in federal court by at least 18 state attorneys general, including California’s.
The government lawyers won’t try to block Friday’s planned shipment of Windows 98 to makers of personal computers, the sources said. Instead, they will focus on letting PC makers change the software, if they choose, before shipping Windows 98-equipped machines to consumers June 25.
Microsoft has indicated it will contest any such suits, which would be likely to allege violations of the Sherman Antitrust Act, an 1890 law that prevents companies from using monopoly power in one market to crush competition in another.
Antitrust lawyers predict the case could become one of the most contentious battles in business history, equaling the breakup of Standard Oil early in this century. The case could drag on for years and affect government policy toward the technology industry for decades.
Sources close to the case said the department and several state attorneys general will hold a news conference today in Washington to announce the lawsuit.
At the center of the case is the allegation that Microsoft is unfairly using its market power with Windows--the software that runs on more than 90% of the world’s personal computers--to maintain that monopoly and extend it into other markets.
The suits would focus on conditions Microsoft places on personal computer makers who license Windows. Under Microsoft’s past contracts, for instance, PC makers would not be allowed to remove Microsoft’s Internet browsing technology from Windows 98.
Microsoft also restricts computer makers from interrupting the sequence of screens that people see when they turn on their computers. Those are the areas where the Justice Department would like to gain greater freedom for personal computers makers.
Critics say Microsoft’s decision to bundle its own browsing software in Windows hurts competitors who make similar software, specifically Netscape Communications Corp. Some had urged regulators to block Windows 98 altogether until the company strips out browsing technology or offers a version of Windows without a browser.
But the antitrust suits appear to stop short of taking such a dramatic step. Instead, it will argue that PC makers should have the right to deactivate Microsoft’s browser and replace the computer icon for it with one for Netscape’s software, the sources said.
Justice also was considering Wednesday whether to include a demand that Microsoft provide instructions on how to remove the browser--or even offer a version without one in the next several months, the sources said.
The states involved in the lawsuit are California, Connecticut, Florida, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, South Carolina, Utah, West Virginia and Wisconsin, a source said. The District of Columbia is also participating, said a deputy D.C. corporation counsel.
