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States move on Microsoft
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April 9, 1998: 1:59 p.m. ET
Several states are preparing their own antitrust action against software titan
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NEW YORK (CNNfn) - Taking litigation into their own hands, several states are preparing antitrust actions against Microsoft Corp. and vow to proceed with or without the Justice Department.
Texas, Ohio and Wisconsin confirmed Thursday that they are mounting independent probes of the Redmond, Wash.-based software titan. Two other states reportedly involved in the effort, Maryland and Minnesota, declined comment.
A draft complaint circulating among the states may be filed before the end of the month with the same federal judge who handled the U.S. government's case against Microsoft.
In that case, prosecutors sought, and won, an injunction to prevent Microsoft from bundling its Explorer web browser in its Windows 95 operating software. Government officials contended the practice allowed Microsoft to squeeze rivals out of the market.
The states' probes give Microsoft a new legal headache just when the company is trying to soften its image and overcome negative publicity arising from the federal suit.
The states are apparently apprehensive that the Justice Department effort will either lose steam or fail to make a significant dent in Microsoft's perceived dominance of the desktop software industry.
An official in the office of Ohio's attorney general confirmed that the state is in "the early stages of a multistate investigation" under the auspices of the National Association of Attorneys General's antitrust task force. The officials said the probe has "several focuses", but refused to elaborate.
A spokesman in the Texas attorney general's office said the state was 13 months into a "comprehensive" probe of Microsoft's business practices, partly focusing on how Microsoft distributes Explorer.
That is a question at the heart of the Justice Department's own inquiry. In their attempts to answer it, Justice officials have subpoenaed some of Microsoft's major competitors in recent weeks, soliciting information about their licensing agreements with Microsoft.
Earlier Thursday, The Wall Street Journal reported that as many as 11 states were involved in the antitrust action against Microsoft. They were said to include Ohio, New York, Maryland, Massachusetts, California, Texas, Wisconsin, and Minnesota. Other states' involvement could not be confirmed.
According to the report, the states have pooled their resources and are cooperating with federal antitrust officials in their probes of the software maker's activities.
Earlier this week, Justice Department investigators indicated they believed they had enough evidence of antitrust breaches by Microsoft to allow them to bring new charges against the company. Top officials of the agency, however, have not yet approved a new antitrust action against the company.
Microsoft has maintained its innocence, contending it will be vindicated once all the facts of the case are known.
A Microsoft official quoted by the Journal expressed his hope that "the states still have an open mind on these issues." The official said the company had only received the states' request for more information in February and was still in the process of compiling and providing thousands of pages of information.
"We are cooperating in every way we can, and we are confident that once they review the facts they will agree that Microsoft is completely within the law," the official said.
Microsoft stock (MSFT) was up 1-16 at 89 in mid-day composite trading Wednesday on the Nasdaq.
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