Microsoft rejects Corel sell-off claims

Microsoft has denied rumours that it is selling its entire 24 per cent stake in Canadian software vendor Corel because of an investigation by the US Department of Justice.

Microsoft has denied rumours that it is selling its entire 24 per cent stake in Canadian software vendor Corel because of an investigation by the US Department of Justice (DoJ).

The company insisted that a form filed by Corel with the Securities and Exchange Commission registering Microsoft's intention to sell its shares "does not indicate a decision by Microsoft whether or not to sell its stake in Corel".

Microsoft was served with a civil subpoena last month, at the same time as it was preparing arguments for an appeal against last year's finding by a federal court that it repeatedly violated US antitrust legislation.

The DoJ is believed to be examining whether Microsoft's stake in Corel could reduce competition in the personal productivity applications space, where Microsoft's Office suite controls 90 per cent of the market.

Corel's WordPerfect runs on Linux, which competes with Windows. Following the deal, Corel claimed it planned to quit the Linux market, raising further concerns about antitrust infringements.

Officials are also investigating the terms of the contract where Corel committed itself to building applications for Microsoft's .Net initiative before releasing them to run on other operating systems. Both firms dismissed the investigation as routine.

"The filing is part of the prudent management of our strategic investments of this size, part of the deal agreed by the parties," said a Microsoft representative.

Defending Microsoft's statement, a Corel representative said: "The common shares underlying the preferred shares have been registered so that, if Microsoft decides to sell its preferred shares to a third party in the US, this third party will then have the option to convert the shares to common shares and resell them."

Also published in Computer Reseller News