Microsoft could be forced to alter the shipment date of its Windows 98 operating system as the US Department of Justice (DoJ) - with the support of an alliance of rival companies - prepares to launch a fresh legal action against the vendor for alleged antitrust activities.
In a separate development, 11 US states are also preparing to file their own collective antitrust suit - with or without the support of the Justice Department.
DoJ investigators said they have collected enough evidence to bring a new suit against Microsoft, while rival company executives - who have chosen not to make their names public - have for the first time submitted a detailed plan of action against the vendor.
The latest action will allege 'illegal maintenance and extension' of the Microsoft operating system in violation of the Sherman Antitrust Act, and threatens to affect the make-up of Windows 98, due to be shipped on 24 June.
The action repeats an existing charge regarding the bundling of Windows 95 with the Microsoft Web browser Internet Explorer, but is potentially more damaging since the first case concerned only the violation of a temporary consent decree. Any future decision would be permanent.
Details of the planned action, which were controversially leaked by the Justice Department, suggested that an initial case may not try to prevent the release of Windows 98 outright, but will seek to force the giant to offer distributors a version that does not include Internet Explorer.
It will also target Microsoft's alleged exclusionary contract terms that it holds with hardware manufacturers and internet service providers. Investigators last week issued civil subpoenas to Compaq and other PC makers.
Antitrust chief Joel Klein will meet with Microsoft lawyers this week to offer the vendor a final chance to prevent new charges being brought.
But Microsoft is unlikely to back down and has responded to the latest charges by claiming they have no basis in law or fact.
A Microsoft representative said: 'Once it has reviewed all the information, the DoJ will agree we are acting within the law.'
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