At a press conference on Monday, legal counsels for Netscape and Sun demanded a broader antitrust case against Microsoft, going beyond the current case brought by the US Department of Justice (DoJ).
They said the US government must act now to enforce existing antitrust law - or else it will be forced to regulate the industry later.
The DoJ's case charges that Microsoft violated the 1995 Consent Decree which prohibits it from tying other products to its operating system. In this case, the DoJ obtained in December a preliminary injuction forcing Microsoft to offer PC manufacturers a version of Windows 95 that does not include the Internet Explorer Web browser. Microsoft is currently appealing this injunction.
But in the mean time, Netscape and Sun are asking for a broader case to be brought against the software giant. Netscape General Counsel Roberta Katz said: "What's really important here is the future of innovation in our industry and in our society. And that is not, I'm afraid, adequately addressed by the current case. We think it's essential that there is a much broader case [against Microsoft]."
When asked what she meant by a broader case, she replied: "An antitrust case that addresses the abuses of Microsoft's monopoly: exclusionary licenses, exclusionary practices in general. Using the monopoly to cut off markets, which is absolutely bad for consumers and bad for the industry."
The press conference was held on the eve of the Senate Judiciary Committee hearing about competition in the computer industry, which will pit Bill Gates against Sun's Scott McNealy and Netscape's Jim Barksdale. Two other industry heavyweights, Michael Dell of Dell Computer and Doug Burgum of Great Plains Software, will also be testifying - reportedly, their testimony was requested by Bill Gates. Industry analyst and journalist Stewart Alsop will also address the hearing.
Legal counsels for Netscape and Sun left no doubt as to the views Barksdale and McNealy will express at the hearing on Tuesday. They delivered an hour-long diatribe against Microsoft, accusing the software giant of "exclusionary and predatory practices" and warning that, if left unchecked, Microsoft would take control of the Internet.
This dominance would in turn impact "news, broadcasting, and virtually everything that we do", said Netscape legal counsel Roberta Katz. Sun counsel Michael Morris added that the world faced "a danger not only of general business monopolisation of, in sequence, one market after the other, by Microsoft [but also] a very serious danger from a political and cultural standpoint, in terms of the potential domination of news and information."
They said they hoped the Senate Judiciary Committee would express its support for the DoJ, encouraging it to pursue its antitrust case against Microsoft.
Both companies maintained that they were not asking for new government regulation, just for existing antitrust legislation to be enforced.
"The last thing that Sun wants to see, is government regulation of the industry", said Sun's General Counsel Michael Morris. However, both companies said that such regulation might be necessary if the government does not act now to enforce antitrust legislation, which they believe is being violated by Microsoft.
They suggested the government might, if all else failed, have to split up Microsoft in two parts: an operating system company and an applications company.
During the press conference, accusations were made that went beyond those addressed by the DoJ's case against Microsoft. Microsoft was accused of trying to force Internet content providers to tie their Web sites to the Windows operating system if they want to be included in the pre-set Active Desktop 'channels' of Windows 98.
Katz also referred to new evidence in the DoJ case. She said: "In the Department of Justice's reply brief in the consent decree case, they quote a Microsoft email, an internal email between two executives at Microsoft. What the email says is: 'We have copied everything Netscape has done, including products and marketing, and that alone hasn't been enough to get us where we want to be. We are now going to have to leverage our dominance in Windows'."
Morris said: "We want members of the Congress and the public to be aware that the country is facing a serious problem. We are at a crossroads. We hope the tools that are available to the Justice Department will be adequate to solve it. But we all need to be aware of the extent of the problem and the extent to which it could interfere with some very fundamental, important parts of our economy and our society."
Gates, meanwhile, also hopes on Tuesday to convince the senators of his case. At a press conference, he warned that DoJ investigations into Windows 98 might amount to product regulation. Late on Friday, however, Microsoft moved to pre-empt possible legal action by announcing that it would amend its contracts with Internet Service Providers. Microsoft will now allow ISPs to promote other browsers. These contracts had come under scrutiny of the European Commission, and were expected to be discussed at the Senate hearing.
Separately, 27 US states filed a brief on Monday with the Federal Appeals Court, which is ruling on Microsoft's appeal against the DoJ. The brief said the attorneys-general of the 27 States support the DoJ's investigation into the bundling of Internet Explorer with Windows 95. Certain attorneys-general are also looking into competitive issues concerning Windows 98, which is expected to be launched later this year.
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