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Justice seeks $1 million a day contempt fine against Microsoft
Company calls action "misguided"
WASHINGTON (AP) -- The Justice Department asked a federal court Monday to hold the computer software giant Microsoft Corp. in contempt for requiring personal computer manufacturers to license and distribute its Internet browser, Internet Explorer.
The department said the company violated a 1995 court order the government obtained to bar the company from anticompetitive licensing practices. The government sought a $1 million a day fine.
A L S O :
U.S. vs. Microsoft Corp., Final Judgement
- full text of the 1995 court order
"Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly," Attorney General Janet Reno told reporters.
255 K/20 sec. AIFF or WAV sound
"This action is unfortunate and misguided," said Microsoft spokesman Mark Murray. "The facts will show that Microsoft is in full compliance with the consent decree" governing the dispute. He said the decree "specifically allows Microsoft to integrate new features into the operating system. That's what consumers want and that's how the software industry has operated for years."
"This is a very serious abuse," said Assistant Attorney General Joel I. Klein, head of the Justice Department's antitrust division. He said Microsoft's action was designed to undermine the dominant market position of its major competitor for Internet browsers, Netscape.
Internet browsers are important, Klein said, because they "could erode Microsoft's operating system monopoly" in the Windows operating system. "This kind of product forcing is an abuse of monopoly power and we seek to put an end to it."
Correspondent Allan Dodds Frank discusses possible Microsoft motives 254K/23 sec. AIFF or WAV sound San Francisco Bureau Chief Greg Lefevre comments on the Microsoft strategy 316K/28 sec. AIFF or WAV sound Klein emphasized that the Justice Department is still investigating other practices by Microsoft but declined to give details.
The Justice Department objected to Microsoft's requirement that computer manufacturers who want to license the Windows 95 operating system also license its internet browser, known as Internet Explorer. Most personal computer makers install Windows 95 at the factory.
Klein said, "These are two different products." He said they should be sold as two separate products, but he adamantly said the government was not taking sides in the war for browser market share between Microsoft and Netscape, whose browser is known as Navigator, or any other company.
"Each of Microsoft's products should compete on its own merits," Klein said.
Microsoft's new browser software blurs the line between personal computers and the Internet. By working closely with Microsoft's Windows 95 operating software, Internet Explorer lets people easily point and click between desktop files and Web sites.
"Anyone can give away a browser, but no one can force it onto a computer desktop unless you have monopoly power," Klein said.
Antitrust law does not bar monopolies achieved by a company's talent and ingenuity, but does prevent abuse of that monopoly.
"When you use that power to snuff out a new entrant, that's what's prohibited," Klein said.
A L S O :
CNNfn - Current Microsoft stock price
The department asked the U.S. District Court here to fine Microsoft $1 million a day until it stops requiring personal computer manufacturers to accept Internet Explorer as a condition of receiving Windows 95.
The government also asked the court to require Microsoft to notify consumers who own personal computers with Windows 95 that they are not required to use Internet Explorer and to give them instructions on how to remove the visual Internet Explorer icon from their computer desktop if they choose.
The department also asked the court to strike down parts of Microsoft agreements with customers that the government said could be used to withhold vital information.
Microsoft has advised the department it would not insist on prior disclosure when the department approaches companies or individuals and assures them it will keep the information confidential, the department said. Klein said this agreement did not cover people who come forward voluntarily.
Microsoft's stock immediately turned lower after the announcement. The shares, which had gained as much as $3 earlier in the session, were down $2.25 to $130 by early afternoon on Nasdaq Stock Market.
Copyright 1997 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Related stories:
- It's out: Microsoft unveils Internet Explorer 4.0 - September 30, 1997
- Microsoft aggressive as lines between Internet, TV blur - July 29, 1997
- Internet Explorer browser has security flaw - March 4, 1997
Related sites:
Note: Pages will open in a new browser window
- United States Department of Justice Home Page
- Antitrust Division - prosecutes serious and willful violations of the antitrust laws by filing criminal suits that can lead to large fines and jail sentences
- U.S. vs. Microsoft Corp., Final Judgement - full text of the court order
- Microsoft - official site
- NetAction: Don't Be Soft on Microsoft! - campaign to get the government to enforce anti-trust laws and stop Micorsoft from creating a monopoly.
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