DoJ suit attacks MS deliberate offensive

Software Document shows deliberate MS effort against Netscape.

The US Department of Justice (DoJ) complaint against Microsoft, filed with the District Court of Columbia last week, paints a detailed and often disturbing picture of how the software giant reacted when it realised tiny start-up Netscape might pose a threat to its software dominance.

The company's public reaction to the DoJ lawsuit has concentrated in the main on one issue - its right to innovate. It claims that this encompasses the right to integrate additional features into its Windows operating system.

But the integration of Internet Explorer in Windows 95 and Windows 98 is not the only issue, and perhaps not even the major one raised by the DoJ complaint. Instead, quoting heavily from Microsoft internal documents and press reports, the 38-page complaint argues that, since 1995, the company has purposefully and methodically worked to eliminate the threat posed to its market dominance by Netscape.

'Microsoft began and continues today, a pattern of anti-competitive practices designed to thwart browser competition on its merits, to deprive customers of a choice between alternative browsers and exclude Microsoft's internet browser competitors,' the document stated, before attempting to establish such a 'pattern'.

Though the complaint includes few new elements, it does manage to paint an alarming picture of Microsoft's business dealings.

The document observes that there are high barriers to entry in the market for PC operating systems, chiefly the number of applications that run only on Windows. Consequently, the most significant threat to the Windows dominance comes from 'new software products that may support, or themselves become, alternative platforms to which applications can be written'.

The complaint offers numerous quotes from Microsoft officials seeking to show that the company did indeed, in 1995, come to see Netscape - and the Java programming language which Netscape supported in its browser - as such a threat, and that it decided to leverage its operating system dominance, as well as its influence over OEMs, ISPs and internet content providers to counter this threat.

The complaint charges that during a meeting in May 1995, Microsoft attempted to persuade Netscape to leave Windows browser markets and concentrate on non-Windows platforms. Microsoft has, of course, denied this.

'Having failed simply to stop competition by agreement, Microsoft set about excluding Netscape and other browser rivals from access to the distribution, promotion and resources they needed to offer their browser products to OEMs and PC users pervasively enough to facilitate the widespread distribution of Java or to facilitate their browsers becoming an attractive programming platform in their own right,' cited the document.

The document quotes an article in the New York Times that quoted Microsoft VP Paul Maritz as saying: 'We are going to cut off Netscape's air supply. Everything it is selling, we're going to give away for free.'

An excerpt from an email message sent by Microsoft CEO Bill Gates suggests Microsoft went further than giving away its browser. It even paid money to some key customers to use Internet Explorer.

'I was quite frank with him (Scott Cook, CEO of Intuit) that if he had a favour we could do for him, that would cost us something like $1 million; to do that in return for switching browsers in the next few months I would be open to doing that,' the email allegedly said.

Another measure to counter Netscape - and the one that has attracted the most attention - was the attempt to force PC makers to ship Internet Explorer with every Windows PC. A Microsoft employee called Christian Wildfeuer allegedly wrote in February 1997 that it would 'be very hard to increase browser share on the merits of IE 4 alone. It will be more important to leverage the OS asset to make people use IE instead of Navigator.'

According to the document, Maritz also wrote, on 2 January 1997: 'I do not feel we are going to win on our current path. We are not leveraging Windows from a marketing perspective. We do not use our strength - which is an installed base of Windows and a strong OEM shipment channel for Windows. Pitting browser against browser is hard since Netscape has 80 per cent market share and we have 20 per cent. I am convinced we have to use Windows; this is the one thing it doesn't have.'

The DoJ complaint also refers to Microsoft's contracts with ISPs and ICPs. Many of these have since been modified, giving partners more freedom to promote competing browsers. But, the DoJ argues, 'these modifications do not remedy the anti-competitive effects such agreements have had and do not prevent Microsoft from entering into similar agreements in the future'.

Concentrating almost entirely on Netscape's predicament, the DoJ document refers only briefly to the other issues that were reportedly a part of investigations.

Surprisingly, it makes scant reference to Java - and only in so far as it pertains to the Netscape Navigator browser. Microsoft's dispute with Sun over the Java language is currently the subject of a separate case.

Another issue, namely Microsoft's control over what users see when they first boot up Windows, receives no more than a few paragraphs. All of which adds up to the fact that when the case comes to court on 8 September, it will no doubt be interesting.