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High noon in browser war
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March 2, 1998: 9:10 p.m. ET
Gates, rivals to outline their positions on Web battle at Senate hearing
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NEW YORK (CNNfn) - It may not be the sexiest story in Washington, but when Microsoft Corp. Chairman Bill Gates testifies at a Senate hearing Tuesday, all eyes will be on the feisty leader as he faces his critics.
Not since the early 1950's -- when former General Motors Corp. President Charlie "Engine" Wilson told a Senate confirmation hearing "what's good for GM is good for the country" -- has a corporate executive faced such criticism about his company's business practices.
But then again, few companies can claim they dominate a market like Microsoft.
With more than 90 percent of the world's computers using Microsoft's Windows operating system, it's easy to see why the Redmond, Wash.-based software giant is the target of a federal antitrust probe and the source of so much anti-Microsoft rhetoric from its rivals.
"Microsoft is stifling competition in clear violation of the law and plainly contrary to consumer interests," Connecticut Attorney General Richard Blumenthal said in a court filing Monday in which 27 states voiced support for the federal government's investigation of Microsoft.
During a pretestimony news conference Monday in Washington, some of Gates' biggest critics urged the government to expand its investigation against Microsoft to include what they call are Microsoft's predatory business practices.
"We all understand that Microsoft's a national treasure and we don't want to do anything that stifles innovation by them, and we don't believe that enforcing the law has ever stifled innovation; there are too many cases where it proves just the opposite," Netscape Communications Corp. President and Chief Executive Officer Jim Barksdale told CNNfn Monday.
"So I don't want to be labeled as whining, I don't want to be labeled as stifling innovation and I don't want to be labeled as somebody who's going against Microsoft," he added. "We just want a more competitive software industry and we think if they would stop some of these practices we could all reap the benefits including Microsoft."
Netscape and Microsoft's other chief rival, Sun Microsystems Inc., have been waging a war against Microsoft for years, arguing the company is trying to control every aspect of the personal computer and to drive rival companies out of business.
However, Microsoft has countered that it is merely responding to customer needs by updating its software to include the latest features, such as Internet browsing.
"There's only one key principle at stake there, which is our ability to innovate our products, Gates said. "We're on track to release Windows 98 and we're full speed ahead."
Microsoft's decision to integrate Windows 95 with the Internet Explorer browser has attracted the attention of rivals like Netscape and Sun, as well as the Justice Department. Last October, the government filed suit against Microsoft, alleging the software giant violated a 1994 consent decree by requiring computer makers to ship Internet Explorer on PC's loaded with Windows 95.
Two months later, U.S. District Court Judge Thomas Penfield Jackson issued a preliminary injunction forcing Microsoft to stop the practice. Microsoft is appealing the decision.
Tuesday's committee meeting was called by Judicial Committee Chairman Orrin Hatch, (R-Utah) a vocal critic of Microsoft.
The panel will look at the role of monopolies and competition in the PC industry. Hatch told reporters he expects the hearing to be fair to both sides.
"There will be Microsoft critics at this hearing -- representatives of Netscape and Sun Microsystems will be there -- and they'll represent quite a number of companies throughout the country who are claiming that Microsoft is violating some of the antitrust laws, so we will hear from them and will also give Mr. Gates plenty of opportunity to tell his side of it."
For his part, Gates is expected to be on his best behavior during the hearing. In recent weeks, the company has toned down its rhetoric amid a rash of criticism.
"He's going to present himself to the American public a sandy-haired kid whose merely out pursuing the American dream," said Tony Perkins, editor of Red Herring, a high-tech industry magazine.
Indeed, on Monday, Microsoft announced it is revising deals with about 40 Internet service providers to allow then to promote browser software made by Microsoft competitors.
Gates said the change had nothing to do with the government's antitrust probe of the software behemoth.
However, critics found the timing of the company's decision odd.
"Seems strange to me they'd do it the day before the Judiciary hearings here in Washington," Barksdale said. 
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