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News > Technology
States back DOJ probe
March 2, 1998: 5:29 p.m. ET

27 attorneys general file brief supporting Justice antitrust inquiry
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NEW YORK (CNNfn) - Attorneys general from 27 states Monday filed a brief in federal court backing the Justice Department's antitrust investigation of Microsoft Corp.
     The states also said U.S. District Judge Thomas Penfield Jackson acted correctly last year when he temporarily barred the software giant from bundling its Internet Explorer 4.0 Web browser with Windows 95.
     The move comes as Microsoft Chairman Bill Gates is preparing to testify Tuesday at a senate hearing on competition in the PC industry. Earlier, Microsoft said it is revising deals with about 40 Internet service providers to allow then to promote browser software made by Microsoft competitors.
     States signing on to the brief include California, Connecticut, Delaware, Florida, Illinois, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, West Virginia and Wisconsin,
     In the filing, submitted to the U.S. Court of Appeals for the District of Columbia, the attorneys general say they are worried consumers may not be getting access to fairly-priced and high-quality software because of the stronghold Microsoft holds on many market segments.
     "There is widespread concern that the competitive health of such markets may be threatened by the practices of a dominant firm, such as Microsoft Corp., which could prevent competing and potentially competing products from getting a fair market test," the officials say.
     Microsoft officials could not be reached for comment.
     The states also say Microsoft tried to strong arm computer manufacturers by requiring them to include Internet Explorer on their systems as a condition for including the latest version of Windows 95 on their systems.
     "Such conditioning could effectively foreclose both PC manufacturers and consumers from choosing a competing Web browser and might enable Microsoft [to obtain] a software systems monopoly."
    
States also criticize judge's order

     The attorneys general also criticized Jackson, saying his preliminary injunction did not come down hard enough on Microsoft.
     "[It] allows Microsoft considerable latitude with respect to the precise method of compliance, expands options for PC manufacturers and consumers and works little or no hardship on Microsoft."
     The attorneys general say they are worried that if Microsoft is allowed to continue integrating Internet Explorer with Windows, Microsoft may later be able to successfully argue that unbundling IE from Windows is cost prohibitive.
     "Indeed, if Microsoft is allowed to continue improper tying in violation of the consent degree during the pendancy of the action, the result might be irremediable harm to the competitive process," the filing says.
     The attorneys general also say that Microsoft wants to bundle the browser and operating system to ensure that it has the upper hand should the browser emerge as a platform for application development.
     "The government has introduced evidence showing that Microsoft itself believes what many analysts and knowledgeable industry participants have suggested: that Web browser technology represents a threat to Microsoft's dominance of operating system software because it offers the possibility of an alternative platform for which applications can be written.
     "Microsoft may have sufficient incentive to use its monopoly power in operating system software to crush or co-opt the competitive challenge from a new technology."
     Microsoft (MSFT) shares closed down 1-3/8 to 83-3/8.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.