Microsoft Rails Against Regulators’ ‘Perverse’ Actions
The Justice Department’s latest antitrust action against software giant Microsoft Corp. is a “perverse” interference that will block the advance of computer technology and hurt consumers, Microsoft said in a harshly worded court filing released Tuesday.
Regulators are “taking sides” with Microsoft’s competitors in an effort to prevent improvements in its popular Windows software, the company said, calling itself the victim of a Justice Department “smear campaign.”
Last month, the department, accusing Microsoft of forcing its Internet software on personal computer manufacturers as a condition of buying Windows, asked a federal judge to stop that practice. In Microsoft’s filing Tuesday, a response to that action, the company asked that the department’s case be thrown out of court.
“It is a very serious matter when any agency of the government proposes to use its regulatory authority . . . to engage in product design,” William H. Neukom, Microsoft’s senior vice president for law and corporate affairs, said at a news conference. “This kind of interference will stifle innovation.”
For almost two years, Microsoft has required PC makers to include Microsoft’s Internet Explorer “browsing” software for the World Wide Web when installing its Windows 95 operating system software. Microsoft argues that Web browsing is a important and “integrated” feature of Windows.
In a brief demonstration Tuesday, Microsoft officials showed that two computers purchased locally over the weekend also had Web software from Netscape Communications Corp., Microsoft’s main competitor in that field. That was evidence that the market is not constrained, Microsoft said.
But the Justice Department contends that the Internet Explorer requirement violates the terms of a 1995 consent decree with the government that sought to restrain the company’s business practices. About 90% of personal computers come with Windows pre-installed; the department contends that Microsoft is using this power to unfairly promote use of Internet Explorer.
The chief of the department’s antitrust division, Joel I. Klein, has said that Windows and Internet Explorer are two separate products that should not be tied together. The department also contends that the two pieces of software are not integrated because Microsoft makes separate versions of the browser for non-Windows computers, and because Microsoft specifically tracks the distribution of Internet Explorer against rival products, particularly a browser made by Netscape.
The department has asked U.S. District Court Judge Thomas Penfield Jackson to hold Microsoft in contempt of court and fine the company $1 million a day if it fails to lift the requirement.
Microsoft lashed back in its brief, saying that “denying consumers the benefit of technologies that have already been developed and tested is perverse.” The company maintains that consumer demand and not regulators should determine the features integrated into software products.
Although Internet Explorer has been offered to consumers as a separate product--a fact the Justice Department seized upon in making its case--Microsoft said that doesn’t preclude it from being an “integrated” part of Windows.
