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Justice refutes Microsoft
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November 20, 1997: 8:00 p.m. ET
Officials in filing say company did not plan on browser integration
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NEW YORK (CNNfn) - The Justice Department fired back at Microsoft Corp. Thursday, charging the software giant chose to integrate its web browser with Windows 95 in a desperate attempt to grab market share from rival Netscape Communications Corp.
Using internal company documents and electronic mail memos, the government said Microsoft originally did not intend to bundle its Internet Explorer browser with its updated operated system Windows 95.
"Microsoft's rendition is misleading and incorrect," a senior government official charged. "Starting on April 20,1994, a series of e-mails makes clear that there was no intent at that point to include what they were then talking about as Mosaic."
The government also charged Microsoft is seeking to delay the antitrust proceeding which in turn harms consumers by giving them fewer choices.
Early this year, Microsoft purchased all current and future royalties for the Mosaic browser that went on to be the foundation of Internet Explorer from Spyglass for $7.5 million.
Officials said in documents dated June 10, 1994 that Microsoft indicated they did not plan to include any other client software "especially something like Mosaic" into Windows 95. That, Justice says, proves that their current assertion that there were always plans to include that functionality is false.
Even after Microsoft purchased Mosaic rights, Justice says they still maintained they did not intend to include browser functionality in Windows 95.
Then, in an e-mail dated Dec. 20, 1996, Justice said Microsoft began to change its tune.
In an e-mail message from Jim Allchin, vice president of the personal and business divisions at Microsoft to Paul Maritz, Microsoft's group vice president for platforms and applications, Alchin reportedly says "I don't understand how IE 4.0 is going to win. My conclusion is we must leverage Windows more. We should first think of an integrated solution."
"We view Microsoft's submissions as saying that under the consent decree they can bundle any two products if they say they have to sell them together," Justice said.
Justice said Microsoft violated the decree when it later went on to tell original equipment manufacturers they must include Internet Explorer 4.0 with Windows 95.
"This document demonstrates the underlying concern in the case that tying together Windows and the Internet browser has been all about insuring they leverage Windows by taking advantage of a monopoly on the desktop and by requiring OEMs to bundle it which in our view is an entirely separate product," the Justice official said.
In its response, Microsoft spokesman Greg Shaw accused the Justice Department of using "selective facts."
Another spokesman said the government had known for more than two years that the company was bringing out a product which integrated Windows 95 with a Web browser.
"They're sort of pulling a memo here and a memo there," said Mark Murray. "The most powerful argument is that, at a minimum, they (Justice Department officials) have known for two years and four months that Internet Explorer is a part of Windows 95."
Murray said the Microsoft Web browser has been a part of Windows 95 "since the very first version was shipped to computer manufacturers in July of 1995."
Murray said: "We think the real issue is whether the government is going to dictate what features can go into software products or whether consumers in the marketplace are going to decide."
"We're not seeking a long court battle and the Justice Department had full knowledge that we planned to incorporate Internet technology into our operating system," he said.
In October, the Justice Department filed a lawsuit against the Redmond, Wash.-based software giant and asked a court to impose penalties of as much as $1 million-per-day on Microsoft.
--By staff writer Cyrus Afzali
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