Netscape files antitrust suit against Microsoft

Netscape Communications Corp., a subsidiary of Internet and media giant AOL Time Warner Inc., filed a lawsuit against Microsoft Corp. Tuesday, alleging that the software maker harmed Netscape with anticompetitive practices related to the Windows operating system.

The lawsuit was filed in the U.S. Federal District Court for the District of Columbia, according to a statement from Netscape. Best known for its Netscape Navigator Web browser, Netscape was acquired by America Online Inc. in 1999. AOL in turn merged with Time Warner Inc. last year.

Microsoft's illegal anticompetitive practices were confirmed in a ruling by a federal district court in June 2000 and upheld by a U.S. appeals court in June of last year. Netscape argued in its lawsuit Tuesday that those anticompetitive practices "resulted in harm to competition and antitrust injury to Netscape in particular," the company said in its statement.

One legal observer wasn't surprised by Netscape's legal move.

"The district court found that liability in connection with Microsoft's conduct was in large part directed at suppressing Netscape," said Mark Schechter, a partner at the law firm Howrey Simon Arnold & White LLP in Washington, D.C. "The court of appeals affirmed it. It's not surprising (Netscape) would piggy back on those findings."

Microsoft declined to comment on the lawsuit in detail, but said it was disappointed at AOL's course of action. "The company has been using politics and legalese to compete against Microsoft for years. It's our feeling that this is just the next tactic in their plans," Microsoft spokesman Matt Pilla said.

The lawsuit is similar to the U.S. government's federal antitrust case against Microsoft, Netscape said. That case centered on a claim that Microsoft abused its monopoly power by cutting deals with PC manufacturers that ultimately hindered sales of Netscape Navigator. The U.S. Department of Justice and nine state attorneys general have reached a tentative settlement in the federal case, but nine other states and the District of Columbia have refused to sign off on the deal and continue to pursue legal action against Microsoft.

Netscape is seeking an injunction against Microsoft and an award of "treble damages," a type of award given in a private antitrust case that would be equal to three times any damages set by a court. The value of the damages and any Microsoft products that might be enjoined from shipping as a result of the suit would be determined by a federal judge, the company said.

The injunction Netscape is seeking resembles a settlement offer submitted in December by the nine states that have yet to agree on settlement terms with Microsoft. That offer included restrictions on how Microsoft would be able to sell Windows to consumers and PC makers.

The aims of Netscape's lawsuit are "entirely consistent" with the efforts of the nine states that have yet to settle, Randall J. Boe, general counsel to America Online, said in the statement.

The lawsuit includes seven counts alleging that Microsoft used illegal anticompetitive behavior to harm Netscape. The alleged pattern of behavior started in 1995, when Microsoft began promoting its own Internet Explorer browser in a way that Netscape argues was detrimental to its own product.

Rulings handed down against Microsoft in the federal antitrust case provide its competitors with ripe opportunities to file private antitrust suits against the software maker, said Emmett Stanton, an attorney with the law firm Fenwick & West LLP who has closely followed Microsoft's antitrust woes.

"Netscape was the clearest target of the actions that the court found illegal," Stanton said. "Many of us have been speculating since the court of appeals (affirmed the lower court ruling) that the potential private plaintiffs would have a much easier time bringing their private lawsuits."

Observers have suggested that Sun Microsystems Inc. might also be in a position to benefit from the federal rulings against Microsoft. The district court cited Microsoft's opposition to Sun's Java programming language in its criticism of the company. However, Netscape is in a better position than Sun to argue that it has been harmed, said Tom Bittman, vice president and research director with Gartner Inc.

"I don't think there are really that many (companies) that can take advantage of the rulings" Bittman said. "This is the big one."

Netscape has the upper hand in its private antitrust suit because past court rulings against Microsoft have already established that it violated antitrust laws, Stanton said. What will be difficult to determine is what damages should be awarded as a result of Microsoft's anticompetitive behavior, he said.

"The question is going to be proving what monetary loss Netscape sustained," Bittman said.

(Sam Costello in Boston contributed to this report.)

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Matt Berger

PC World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?