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!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Matt Berger

PC World
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?