Microsoft Foes Seek Penalties in a Wide Range of Markets
Concerned that the government may be softening its stance in the Microsoft Corp. antitrust case, opponents of the software giant are seeking tough restrictions on the company even in technology markets it does not dominate.
The Washington-based Computer and Communications Industry Assn. sent government lawyers a white paper arguing that Microsoft is using its flagship Windows personal computer operating system software as a “springboard” to dominate the lucrative market for the software that operates computer servers.
Servers are high-powered computers that store much of the data on the Internet and manage the back-office operations of many mid-size and large corporations. Microsoft has 22% of the Internet server market and about 38% of unit sales to the broader office server market, according to Giga Information Group.
“Microsoft recognizes the importance of the [server] network market and is moving aggressively to control that market much the same way it moved successfully to control the market for desktop operating systems and Internet browsers,” CCIA said in its 40-page white paper, sent Tuesday.
The software giant’s push into servers, as well as its renewed vigor in developing software for the booming market for hand-held wireless devices, has rivals voicing concern that the government may not be focusing intently enough on curbing Microsoft’s power in areas outside the personal computer software operating system market that is at the heart of the landmark antitrust lawsuit filed by the U.S. Justice Department, 19 states and the District of Columbia.
Keith Blackwell, president of Bristol Technology Inc., a Danbury, Conn., software firm that filed its own federal antitrust suit against Microsoft in 1998, said several executives he’s talked to see Microsoft’s targeting of the hand-held wireless device and server markets “as a bigger issue than the more limited scope of some of the things the government addresses in its antitrust cast.”
Much of the industry concern centers on two new Microsoft products: the company’s recently released Windows 2000 server software and an updated version of Microsoft’s Internet Explorer Web browser.
Corporate computer managers will have to jettison most rival computer networking software and buy Windows 2000 Server if they want to install the desktop version of Windows 2000 on computers hooked to the network, CCIA said in its paper. That’s because some database, word processing and other applications require “direct technical linkage” to Windows 2000 Server from a PC hooked to a network.
Similarly, Microsoft was accused earlier this month of abandoning Internet standards it had pledged to support in favor of implementing proprietary technologies in a new version of the Internet Explorer browser that is expected to appear in Windows Me, the successor to Windows 98.
“We are incensed by Microsoft’s arrogance, and perplexed by its schizophrenic decision to support standards on one platform while undercutting them on another,” said Jeffrey Zeldman, a group leader of the Web Standards Project, which is spearheading the effort.
But sources say the Justice Department, faced with a court-imposed “fast-track” remedies schedule, probably won’t try to break up Microsoft or broadly restrict its conduct in areas unrelated to its consumer Windows software, which runs more than 90% of all personal computers.
But a lawyer working for one of the 19 states that are part of the government’s antitrust suit against Microsoft rejected any notion that the government has gone soft.
“I have a duty to obey the law and enforce the law, and just because some people might be hurt [financially] you don’t fail to do your job” and seek appropriate punishment, said Wayne Klein, an assistant Utah state attorney general.
Speculation over what punishment will be sought has intensified as the government races to meet its first deadline for filing remedies on Tuesday.
Among the remedies believed to be under review are compelling Microsoft to remove its Internet Explorer Web browser from some current and future versions of Windows, offering uniform pricing of its flagship product, and giving PC makers and rival software developers more information about the Windows software code so they can provide competing or customized software solutions for their customers.
But concerns about Microsoft’s alleged attempts to dominate the server and hand-held markets have experts posing more far-reaching punishment.
Some states are considering trying to compel Microsoft to develop its business productivity software package, Microsoft Office, for rival operating systems such as Linux. They also want to bar Microsoft from releasing new versions of Office for Windows before it releases it for other PC platforms. Industry executives say that, together with some sort of restructuring of Microsoft, such measures will do more to stimulate software competition than remedies aimed at restraining the company’s business behavior.
“We favor a structural remedy--a breakup of the company” in some form, said Michael Morris, general counsel for Sun Microsystems Inc. “And there are certainly enough facts brought out in this case to warrant a remedy aimed at addressing the server problem.”
The states have been working furiously to thrash out alternatives, but still have wide areas of disagreement.
“Some of the states are interested in divestiture,” said one attorney general who is suing the company. “Some states are interested only in obtaining reimbursement for the people in their states that have been injured” by Microsoft.
Times staff writer Joseph Menn contributed to this report.
