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Technology
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Sun sues Microsoft
Company claims its business was hurt by anti-competitive business practices.
March 8, 2002: 3:19 p.m. ET
By Staff Writer Richard Richtmyer

graphic NEW YORK (CNN/Money) - Sun Microsystems Friday filed a private antitrust lawsuit against Microsoft, seeking financial damages its top lawyer expects could amount to more than $3 billion.

The suit, a follow-on to the U.S. Justice Department's landmark case against the company, alleges that Sun's business was harmed by Microsoft's anti-competitive practices.

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In its complaint, Sun lays out a laundry list of allegations against Microsoft, but its core argument is that the company has used its monopoly in the PC operating system market to undermine Sun's "Java" software.

Java is a programming language developed by Sun that works on a variety of computers, regardless of the underlying operating system. Because of its interoperability, it has been widely used on Web sites, and it is a key component of Sun's broader business strategy.

Last year, Sun settled a federal lawsuit against Microsoft after the software maker created a Windows-only version that was incompatible with other software.

Microsoft paid Sun $20 million and agreed to no longer license from Sun any current or new versions of Java.

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At the same time, Microsoft decided not to even include the software tools needed to read programs written using older versions of Sun's Java with its newest operating system, Windows XP, which began shipping last November.

"There is nothing in the agreement that we signed that required them to give up support for [Sun's Java]," said Michael Morris, Sun's general counsel.

"That was purely a unilateral decision by Microsoft," Morris said.

Microsoft spokesman Vivek Varma on Friday called Sun's claims legally and factually baseless.

"Millions of consumers who use Windows also use Java every day," Varma said. "Any consumer using Windows today can easily access and use Java."

Sun is a leading supplier of servers -- large computer systems used for everything from hosting Web sites to executing bank transactions -- and revenue from Java represents a very small proportion of the company's total.

But Morris said the company will be able to prove that Microsoft's actions also have materially harmed its server business. And while the lawsuit does not specify a dollar amount, he said he "would be surprised if we couldn't prove damages north of $1 billion."

He also pointed out that under anti-trust law, Sun would ask for "treble damages," which would be three times the amount of the actual damages suffered. So the total amount of damages potentially sought could exceed $3 billion.

In addition to the financial damages, Sun is asking the court immediately to force Microsoft to begin distributing its version of Java again.

The company also is asking that Microsoft be forced to disclose the inner workings of key products like its Internet Explorer browser, as well as the elements of its ".NET" Web-services development platform.

Microsoft (MSFT: up $1.23 to $63.95, Research, Estimates), the dominant supplier of desktop computer operating systems, was found guilty of abusing its monopoly in that market and is currently in the process of working out a remedy agreement with the government.

CNN/Money's special report: Microsoft on trial

Because the federal court system has ruled that Microsoft has violated antitrust laws, legal experts are expecting scores of follow-on suits against the software maker that use that case as a foundation.

Other companies that have filed suit so far include Netscape -- a unit of CNN/Money parent company AOL Time Warner -- and Be Inc., which had made an operating systems that was positioned as an alternative to Windows.

Morris said Sun's case, which he expects to be heard by a judge within a year, will use the Justice Department's case as proof of many of its claims.

However, he said the company will expand on the previous case to attempt to prove that Microsoft has also engaged in anti-competitive practices in the market for servers used in corporate networks and that its current business strategy is aimed at ultimately monopolizing the Internet.

"We believe that Microsoft's ultimate goal is nothing less than to establish Microsoft-controlled choke-points to Internet access so that Internet access is available using only products made by or approved by Microsoft," Morris said. graphic

Click here to send mail to Richard Richtmyer.

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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.

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