Microsoft tries again to get anti-trust suit dismissed

By Torsten Busse
IDG News Service, 9/9/98

Microsoft Corp. yesterday again argued that the U.S. government's antitrust lawsuit against it should be dismissed, citing evidence from archrival Netscape Communications Corp. that, according to Microsoft, shows the government's central arguments are "fatally flawed."

In a 48-page motion filed in U.S. District Court for the District of Columbia today Microsoft reiterated its stand that the evidence presented by the Department of Justice (DOJ) and 20 U.S. states is "without merit."

Microsoft also asked Federal District Court Judge Thomas Penfield Jackson to "ignore the government's last-minute attempts" to "rewrite the lawsuit," filed in May, by adding new evidence to the case.

The software giant's brief today comes in response to last week's reply by the DOJ to Microsoft's request for summary judgment by the judge. In that reply the government last Tuesday presented new evidence, arguing that Microsoft pressured Intel Corp., Apple Computer Inc., RealNetworks Inc. and Intuit Inc. to stop development on their competing technology or not support rival technology, including Java and Netscape Communications Corp. software.

A day later Microsoft asked the court to limit the scope of the antitrust case filed in May.

Today Microsoft dismissed the DOJ's characterization of its talks with Apple, Intel and RealNetworks as part of a pattern of anticompetitive conduct, saying that such discussions occur on a routine basis between companies in the software industry.

"Consumers would be decidedly worse off if such coordination of development efforts did not occur, and Microsoft would surely be the subject of vociferous complaints under the antitrust laws if it refused to cooperate with the many companies that develop products that run on top of its operating system software," the brief states.

Spokespeople for the DOJ could not be reached for comment yesterday.

In its reply brief, Microsoft today again argued that the government had failed to address Microsoft's arguments in favor of summary judgment, and instead attempted to add new "last-minute allegations" that were not part of the government's complaint filed in May 1998.

"In sum, plaintiffs have done exactly what all plaintiffs do when confronted with a meritorious summary judgment motion," Microsoft said in its brief today. "They attempt to distract the Court from the fatal defects in their claims by slinging as much mud as they can at the defendant and by giving prominence to numerous irrelevant facts in a desperate attempt to cloud the issues."

Microsoft's lawyers go on to argue that as part of the DOJ's "last-minute effort to refashion its case" the DOJ has attempted to "de-emphasize" its May 1998 contention that Microsoft had improperly "tied" Internet Explorer to Windows 95 and Windows 98.

In the antitrust lawsuit filed in May, the DOJ and 20 states, led by New York, allege that Microsoft is using its dominance of the PC operating system market to control other markets, including the Internet, in violation of antitrust law. The lawsuit accuses Microsoft of illegally tying its browser to its operating system; forcing exclusionary contracts on Internet service and content providers and independent software vendors; and restricting computer manufacturers from removing features from Windows 98 so customers could use Netscape's rival Web browser.

In the brief today Microsoft again argued that the antitrust lawsuit against it should be dismissed through summary judgment, because the software code in Windows 98 that provides Web browsing functionality cannot be removed from the operating system without seriously degrading it; because the inclusion of Microsoft Internet Explorer technologies in Windows 98 offers benefits for consumers and software developers and because Microsoft has prevented Netscape from distribute its Web browser to consumers.

Microsoft offered as support of its argument part of a memo written by Netscape's counsel in March 1998 to the DOJ in which the Microsoft rival conceded that it is impossible to remove Internet Explorer technologies from Windows 98 without damaging the operating system. The letter shows, again, that the government's claims are without merit, Microsoft said.

"We are totally unable to provide examples of files that can or can not be deleted from Windows 98 since, as we discussed this week, it is our understanding that it simply is not possible to delete any portion of IE, or of browser functionality, from Windows 98 as presently configured without severely interfering with the operating system," the letter said in part.

In addition Microsoft said it has collected public and confidential evidence from Netscape that refute the DOJ's allegations regarding Netscape's ability to distribute its products.

Among the publicly available documents Microsoft cites is a Sept. 2 Netscape press release claiming that "since July, Netscape estimates that more than 12.4 million copies of its market-leading Netscape Communicator and Navigator client software have been downloaded from Netcenter and licensed mirror sites."

"The reason why a lower percentage of Internet users are using Netscape Navigator now than before, however, has nothing to do with Netscape's ability to distribute its Web browsing software," Microsoft's brief reads. "It is because Microsoft has dramatically improved its Internet Explorer technologies since they were first included in the initial version of Windows 95 released to OEMs in July 1995....Distribution does not guarantee usage. Indeed, the reality is that consumers have a choice, and although plaintiffs may not like it, consumers are increasingly choosing Microsoft's Internet Explorer technologies over Netscape's web browsing software on the merits."

Judge Jackson will hear oral arguments on the motion for summary judgment on Sept. 11, while the antitrust case itself is slated to begin Sept. 23.