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Foes fire at Microsoft
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July 23, 1998: 12:13 p.m. ET
RealNetworks exec tells Senate panel software giant 'breaks' his product
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NEW YORK (CNNfn) - A computer industry executive testified at a Senate hearing Thursday that Microsoft Corp. deliberately took measures to prevent his company's product from working in order to stifle competition.
At a Senate Judiciary Committee hearing on competition in the software industry, Robert Glaser, RealNetworks Inc. chief executive officer, said Microsoft is preventing Internet surfers from using his company's software.
RealNetworks (RNWK) makes the RealPlayer streaming software, which allows real-time delivery of video and audio over the Internet. Glaser, a former 10-year Microsoft veteran, said Microsoft's upcoming Media Player software program effectively and deliberately "breaks" the RealPlayer program.
Glaser said the new version of Media Player interferes with the operation of RealPlayer, forcing users to switch to Microsoft's product.
He explained that because Windows Media Player is based in part on technology Microsoft licensed from RealNetworks last year, the software is compatible with earlier versions of RealPlayer, but not the last two versions of the program.
"Although it has the option to do so, Microsoft has declined to pay for an update for our license, which would allow them to use the latest version of our technology," Glaser said.
"Instead of either licensing our new products or peacefully coexisting with us, Microsoft has instead tried to stop our products from being used."
"Microsoft has stated publicly that it plans to bundle Media Player with its (Windows 98) operating system," Glaser added. "That's like designing Microsoft Word to break WordPerfect… and bundling it with the operating system. Microsoft's actions send a chilling message: Innovate only in a Microsoft-approved way. What Microsoft is doing is wrong and must be stopped."
Glaser, responding to a question by Sen. Orrin Hatch, head of the Senate Judiciary Committee, noted that Microsoft programmers would have had to write code specifically to create the incompatibility between Media Player and RealPlayer.
Microsoft, which owns a 10 percent stake in RealNetworks, develops the NetShow streaming program, a direct competitor of RealPlayer.
Hatch, R-Utah, the Senate's most outspoken critic of Microsoft, said Glaser is not alone in his charges against the software giant.
"We're getting complaints from all over the place, from people just like you, who are suffering from treatment similar to the way your company has been treated (by Microsoft)," Hatch said.
Challenge to Microsoft
Hatch called for Thursday's hearing to examine "competition and innovation in the digital age."
More specifically, Hatch called the hearing as a challenge to Microsoft Corp., which he has accused of using its monopoly power to try to control access to and commerce on the Internet.
Glaser was not alone in his harsh words against Microsoft. Larry Ellison, Oracle Corp. (ORCL) chairman, took Microsoft to task for its credo that it should be allowed to innovate without government interference.
"If an innovative piece of software comes along, Microsoft copies it and makes it part of Windows," Ellison said. "This is not innovation. This is the end of innovation."
Ellison added that if Microsoft is allowed to continue its "just-add-it-to-Windows" approach, the information age will be controlled by one company.
"Microsoft is already the most powerful company on earth, but you ain't seen nothing yet," Ellison said.
Although several Microsoft rivals participated in Thursday's hearing -- including Glaser, Ellison and Lotus Development Corp.'s Jeff Papows -- Microsoft itself declined to send a representative, accusing Hatch of orchestrating "a campaign against Microsoft."
Hatch said Microsoft also rejected an invitation to provide witnesses who would provide Microsoft-friendly testimony at the hearing.
"The fact is," Hatch said, "our doors have not exactly been knocked down by companies willing to defend Microsoft's business practices."
Microsoft (MSFT) shares fell 1 to 115-3/4 in late-morning trading. 
-- by staff writer John Frederick Moore
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