US DoJ, 20 states file suits against Microsoft

The US Department of Justice (DoJ) as well as attorneys general from 20 US states and the District of Columbia today filed antitrust lawsuits against Microsoft, saying that the company's business practices risk putting a "chokehold" on the software industry.

The DoJ's suit, filed in US District Court, accuses Microsoft of unfairly using the monopoly advantage it has with its Windows operating system to gain a larger share of other software markets, including Internet browsers.

Damage is already occurring in the marketplace, computer manufacturers are being denied options and "products are being forced through the stream of commerce," said assistant US attorney general Joel Klein at a press conference.

"This action is intended to ensure that consumers and the computer manufacturers have the right to choose which software they want installed and not have that software chosen for them," said Janet Reno, US attorney general.

The government suit does not seek to block the software giant from releasing Windows '98, but it would require Microsoft to include archrival Netscape Communications' Internet browser with Microsoft's Internet Explorer (IE) in Windows 98, which was just released to PC makers and is due out commercially in June. If Microsoft does not want to include Netscape, it must unbundle IE from Windows '98.

The DoJ and state lawsuits overlapped on the following demands:

-- The end of Microsoft's practice of forcing Windows 98 purchasers to take Microsoft's Internet browser. If Microsoft insists on including its browser in Windows 98 it should also include Netscape's browser. If Microsoft does not include Netscape's browser, it must unbundle its own browser.

-- The requirement that Microsoft give computer manufacturers the right to install their own first screen at the conclusion of the initial bootup sequence.

-- Require Microsoft to give computer manufacturers additional options for installing browser software on new computers.

-- Forbid Microsoft from enforcing contractual provisions that require providers of Internet and online services and Internet content providers to limit their distribution and promotion of competing browsersThe DoJ and the states based their cases on internal documents from Microsoft and statements from company officials, according to DoJ officials.

The attorneys general from New York, Iowa and Connecticut participated in a press conference announcing the move.

"Our objective is not to protect any single competitor in the software or any other part of the industry," said Richard Blumenthal, the Connecticut state attorney general. "It is to provide a level playing field and choices for consumers unencumbered by the kinds of exclusionary tactics that Microsoft has exploited by virtue of its dominant position," said Blumenthal.

The moves come after negotiations between Microsoft and US state and federal prosecutors and collapsed over the weekend. Microsoft said yesterday that talks came to an impasse because the government wants Microsoft to "abandon its principle of product innovation." The company particularly took umbrage with the option presented by government prosecutors that Microsoft offer rival software in its operating system bundle.

The lawsuits expand on an October, 1997 complaint filed by the DoJ in federal court, which maintained that Microsoft was violating a 1995 consent decree by forcing PC makers to include the IE browser as a condition of licensing Windows 95.

A spokesman for the European Commission said this morning that the EC plans no separate action against Microsoft in light of the US suits.

"We have left the floor to the American authorities not because we're not interested, but because the US has a greater ability to act," said Stefan Rating, spokesman for European Competition Commissioner Karel Van Miert.

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