DoJ dog-fight leaves MS partners feeling uneasy

Software Antitrust lawsuit turns screw on Microsoft, threatening Windows 98 delay.

Microsoft was dealt two severe blows this week when the US Departmentows 98 delay. of Justice (DoJ) and 20 states filed their antitrust lawsuits, seeking a preliminary injunction, requesting the software giant to unbundle Internet Explorer from Windows 98.

On 18 May, US Attorney Janet Reno confirmed that the DoJ felt Microsoft had used its monopoly to 'develop a chokehold on the browser market', and the alternative was to unbundle its browser from Windows 98 to ensure an open market.

Joel Klein, assistant attorney general, said that while the DoJ would not try to stop distribution of Windows 98, he vowed the authority would seek other legal avenues in pursuit of its case.

In a further move, 20 states have filed a preliminary injunction also seeking that Microsoft remove Internet Explorer from its OS. The states are asking for another browser to be included. The DoJ will hold a hearing on this.

The move followed an acrimonious breakdown in eleventh hour talks between the vendor and the DoJ at the weekend.

Microsoft accused the DoJ of unreasonable demands with 'no basis in law'.

The company cited the DoJ's order that the Netscape browser be incorporated into W98 as 'the key stumbling block in negotiations'.

'We had no choice but to resolve this matter in court,' said Microsoft CEO Bill Gates.

Sean Frohlich, MD of Microsoft reseller Bytes Technology Group, said: 'In terms of cash through the tills, this is not a big problem for us, but from a channel perspective it is not good news.'

He warned: 'It's a mark in the sand for Microsoft investors and channel partners because it is likely to create doubt in the minds of IT directors and decision makers.'

Jason Rabbetts, business unit manager at Ideal Hardware, agreed: 'This is more likely to hit the consumer market, where W98 is being targeted.

It might encourage business customers to ignore W98 and ship NT instead.'

Microsoft's share price fell 3.5 per cent on the announcement.