Microsoft investigated over Corel stake

Microsoft is once again being investigated by the US Department of Justice (DoJ) for potential abuses of antitrust law, this time relating to its $135m strategic investment in Corel last October.

The company was served with a civil subpoena three weeks ago, according to the Wall Street Journal, at the same time as it was preparing arguments for an appeal against last year's finding by a federal court that it repeatedly violated US antitrust legislation.

A spokeswoman at the software giant said: "Microsoft has received information from the DoJ about the investigation and is co-operating fully with its request for information."

"The investigation is narrowly focused and is supposed to be confidential, but we don't believe there are any issues with either transactions and we are confident that once they are reviewed, we will not be challenged," she added.

The DoJ is believed to be examining whether Microsoft's stake in Corel could reduce competition in the personal productivity applications space, where Microsoft's Office suite controls 90 per cent of the market.

Corel's WordPerfect rival also runs on the Linux freeware operating system, which competes with Windows NT/2000. Following the deal with Microsoft, however, Corel said it planned to quit the Linux market, raising further concerns about antitrust law infringements.

Officials are also investigating the terms of the contract whereby Corel committed itself to building applications for Microsoft's .Net web services initiative before releasing them to run on other operating environments.

Documents are likewise believed to have been sought from Borland Software, following its signing of a $100m licensing deal with Microsoft last year.

Separately, Microsoft has promoted its existing consumer business head, Rick Belluzzo, to become president and chief operating officer, in yet another executive shake-up.

The move indicates the supplier's increasing focus on consumer services in anticipation of its move to a web services model under the .Net moniker.

Belluzzo will take on most of the tasks of the Redmond giant's existing chief operating officer, Robert Herbold, who has announced his retirement, although he will continue to work part-time at Microsoft.

Belluzzo will likewise assume some of the responsibilities of chief executive, Steve Ballmer, to provide the latter with more time to focus on developing Microsoft's business strategy.