Microsoft Says No 'Legal Basis' To Halt Windows 98
WASHINGTON (AllPolitics, May 18) -- The U.S. Justice Department and 20 states, plus the District of Columbia filed antitrust lawsuits against Microsoft, Attorney General Janet Reno announced Monday.
Reno said Microsoft had used its monopoly in personal computer operating systems to "develope a chokehold" on the Internet browser software market.
She said along with the suits, the government was asking for a temporary
injunction to prevent Microsoft from distributing the newest version of its operating system, Windows 98, which it began shipping Monday morning.
Microsoft issued a statement challenging the right of federal or state
governments to try to block the shipments of Windows 98.
"We don't believe that the government has any legal basis if they try to
block the shipment of Windows 98. There would be no benefit to denying
consumers access to this latest technology," said company spokesman Mark
He said while talks with the government to avoid lawsuits broke down
on Saturday, "We are still open for further negotiations. We would like to settle with them but we can't accept unreasonable demands that limit the ability to innovate."
The states want Microsoft to either strip its Internet browser from the
Windows 98 system or to include copies of browers made by Netscape and another software developer of Microsoft's choice.
Windows 98 will be available for consumer purchase June 25 if distribution is not blocked.
Microsoft has vowed to fight. And Gates has a warning: "Any government action that would delay or derail Windows 98 would hurt the American economy and would cost American jobs."
That argument hasn't swayed Justice investigators, who are looking into whether Microsoft is exercising too much power in two arenas Americans are increasingly reliant on: computers and the Internet.
Justice attorneys argue Microsoft, which controls more than 90 percent of the computer operating software market, is using illegal tactics to maintain a monopoly.
It's a violation of U.S. anti-trust law for a company with an overwhelming share of a market to use its power to hurt competitors so it can maintain or extend its dominant position.
And some at Justice believe Microsoft used its monopoly to control another field, the so-called browser market, the software that lets computer users view pages on the Web. Think of the browser as the gateway to the Internet, the country's new information and economic frontier.
At a congressional hearing a Microsoft competitor explained what's at risk.
Sun Microsystems CEO Scott McNealy said, "Microsoft has the power today to exercise predatory and exclusionary control over the very means by which we access this Internet. It's a lot like General Motors having the ability to dictate what gasoline you put in your car."
But what has Microsoft allegedly done wrong?
Much of the Justice investigation has focused on Microsoft's competition with Netscape, Microsoft's chief competitor in the browser market.
The Justice probe asks these questions:
- Is Microsoft illegally tying its browser to its Windows software to kill Netscape and other browser competitors?
- Did Microsoft offer its browser free to computer makers to undermine Netscape?
- Did Microsoft try to force computer makers into signing contracts requiring them to install only the Microsoft browser?
Microsoft says it's no monopoly, but an innovative company making access to the Internet just one click away.
Experts say don't expect a last minute compromise. Anti-trust expert John Gardner told CNN, "The Justice Department and Microsoft have drawn a line in the sand."
Justice sources say what is at stake is the public's access to the emerging cyberspace economy.
CNN's Pierre Thomas contributed to this report