Following a week of legal posturing, claims and concessions byt tries to make up for lost time. Microsoft, the US Department of Justice and 20 US states are taking the software giant to court, accusing the company of monopolistic practices.
At the core of this dispute lies the Internet and its plethora of business opportunities. Microsoft got in on the game late, and has been desperate to make up lost ground against rivals such as Netscape.
The stakes are high: as Bill Gates mentioned in his autobiography The Road Ahead, there has never been an industry leader from one era of computing technology (such as the domination of the PC desktop) which has successfully moved into another era (such as communication over the Internet). So Gates has pulled out all the stops to fight Microsoft's extremely large corner of this market.
In his way is Netscape, with its Navigator Web browser which held almost the entire market until Microsoft shipped Windows 95 with Internet Explorer three years ago. Netscape's share has dropped by 40%, but the company blames Microsoft's practice of building the browser into the operating system and giving it away free for this erosion.
This is where the finer points of the case come to light.
Eric Brown, an analyst with Forrester Research, told PC Week: "Is a Web browser a separate product or a feature of another product? The problem is that Windows is so dominant that it has been able to take a product and call it a feature. If the DoJ can create an effective precedent with this case, it will prevent Microsoft aggressively adding features to new products like its Windows NT 5 operating system and in the process quashing other smaller players in the market. It will box Microsoft in and curb its monopoly."
The release of Windows 98 is a minor event compared with next spring's release of Windows NT 5.0, Microsoft's strategic weapon for penetrating the upper reaches of corporate computing.
"Microsoft is a relative newcomer to this market and has adopted a strategy of bundling products into NT in areas where its technology lags behind, buying itself time to catch up," said Brown.
At present, the DoJ has not included Windows NT in its complaint, but according to Fred Marx, a lawyer with US law firm Hemenway and Barnes, the company will now have to run everything it does through the lawyers.
"When a similar case was brought against IBM in the 70s it crippled the company's innovation for more than a decade," said Marx. "Microsoft's tying activities need to be stopped, but it's a bit like penalising a good sportsman for winning every race."
On the issue of Microsoft incorporating competing products into its OS, he drew a comparison with a public utility. "Micro-soft could be regulated like a power company or the railway lines where lots of service providers offer their product over the same infrastructure," he suggested.
Marx suggested that Microsoft could also be broken up into two companies, one selling the OS and the other applications, in a bid to stop the company capitalising on its success in the OS market to win in the applications software market too, which is helping to stifle competition from its rivals.
The trial could take up to a decade in court to settle, although Marx thinks this is unlikely.
He believes Microsoft might try and settle out of court with Netscape.
"And if it doesn't, it will have its own Year 2000 problem: Windows Zero (where Microsoft is unable to bring out a new version of the OS)," he said. "Not that bringing a product to market late is anything new for Microsoft."
MICROSOFT UNDER FIRE: A BRIEF HISTORY
1991: US Federal Trade Commission (FTC), Department of Justice (DoJ) and European Commission begin separate investigations of Microsoft.
1993: FTC probe ends.
1995: DoJ investigation ends when Microsoft crafts and signs consent decree and agrees to change OEM licensing contracts.
- Oct 7: Sun sues Microsoft, alleging it has broken Sun's Java licensing agreement; Microsoft countersues.
- Oct 27: DoJ sues Microsoft for violating consent decree by requiring OEMs to bundle Internet Explorer with Windows 95; DoJ asks court to fine Microsoft $1 million a day.
- Nov 10: Microsoft asks the court to dismiss the DoJ suit.
- Nov 18: Sun files motion in US District Court asking that Microsoft be barred from using Java-compatible logo.
- Dec 11: US District Court Judge Thomas Penfield Jackson issues preliminary injunction prohibiting Microsoft from requiring OEMs to bundle IE with Windows 95.
- Dec 15: Microsoft appeals preliminary injunction.
- Jan 22: Microsoft agrees to comply with the injunction by letting OEMs remove or hide IE.
- Feb 27: Sun and Microsoft square off in court to argue over a motion that Microsoft is illegally using Java trademarks and logos.
- March 2: Microsoft alters contracts with ISPs, allowing them to promote other vendors' browsers.
- March 3: Bill Gates testifies, along with other industry leaders, before the Senate Judiciary Committee on software competition.
- March 24: US District Court issues a preliminary injunction against Microsoft prohibiting the company from using Java-compatible logo until its products pass compatibility testing by Sun.
- April 10: Microsoft revises its contracts with Active Channel partners to allow them to promote other vendors' browsers.
- May 12: Sun files suit against Microsoft, asking to halt shipment of Windows 98 because it contains an incompatible version of Java.
- May 14: Microsoft, DoJ and 20 states announce they are in settlement discussions; Microsoft delays shipment of Windows 98 to May 18; DOJ and states agree not to file suit while in talks.
- May 18: DoJ and 20 states file lawsuit against Microsoft alleging anti-competitive practices.
- June 25: General availability for Windows 98 scheduled.
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