Alleging that Microsoft Corp. is strong-arming computer-makers into bundling its Internet Explorer browser onto their machines, the Justice Department went to court today seeking a US$1-million-a day-fine against the software-maker for allegedly violating a 1995 court order that barred it from anticompetitive practices.
The department, which has drawn criticism from industry, consumer advocates, and certain quarters in Congress for not taking decisive action to curb Microsoft's metastatic reach through much of the consumer and business software markets and the Internet, used harsh language in presenting its complaint to the US Court of Appeals in Washington, DC.
At a news conference, Attorney General Janet Reno accused Microsoft of "unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly."
The heart of the government complaint: Microsoft has required personal computer manufacturers to bundle versions of its Internet Explorer browser software along with Windows 95. That, the Justice Department contends, interferes with the PC-makers' and consumers' choice of competing software.
Assistant Attorney General Joel I. Kline, head of Justice's antitrust division, said Microsoft's behavior "is an abuse of monopoly power and we seek to put an end to it."
He added: "Anyone can give away a browser, but no one can force it onto a computer desktop unless you have monopoly power.... When you use that power to snuff out a new entrant, that's what's prohibited."
In this case, there is really only one competitor: Netscape. Despite a 15-month onslaught by the Microsoft marketing machine, Netscape still holds better than 60 percent of the market. Klein took pains to say that the government is not taking sides in the Microsoft-Netscape battle. He also said that his division is looking into a variety of Microsoft business practices, which he declined to specify.
Microsoft prepared a large-scale response, but appeared surprised by the announcement.
"This action is unfortunate and misguided," spokesman Mark Murray told the Associated Press. He insisted that Microsoft is in compliance with the 1995 court consent decree, which he said "allows Microsoft to integrate new features into the operating system. That's what consumers want and that's how the software industry has operated for years."
Microsoft opponents were enthusiastic about the news.
"I think it's fabulous," said James Love, director of the Consumer Project on Technology, a Ralph Nader group that this month launched a campaign to force new government scrutiny of the software giant. "But we've been down this road before with Justice, and we'll just have to take a close look at it and see where it goes."
That road includes an extensive Justice Department antitrust probe that ended with the 1995 court order. That probe, under the guidance of former assistant attorney general Ann Bingamon, disappointed Microsoft critics who have argued that the giant's unrivaled and growing sway in so many parts of technology industry represents a monopoly menace.
Microsoft's defense to the Justice Department's latest foray will probably rest on the shape of its anticipated Windows 98 software. The operating system aims to erase the distinction between desktop and network browser by incorporating Internet Explorer into all functions.
"If Justice would have waited until Windows 98, Microsoft would have been on more solid ground," said Chris Le Tocq, an analyst with Dataquest. "By then the OS and browser will be the same. That's probably one of the reasons they [the Justice Department] went ahead with this now."
The Justice Department announcement came only three days after sources were quoted as saying that the European Union is launching a wide-ranging investigation of Microsoft's licensing practices. The precise target of the inquiry, which has not been officially acknowledged, is unknown.
Wired News staff members Dan Brekke, Chris Jones, Kristi Coale, and Rebecca Vesely, and Reuters contributed to this report.
