US Report: Microsoft seeks dismissal of government's suit

Drawing heavily on a U.S. Appeals Court ruling in June, Microsoft Monday outlined in detail its defence against the government's charges that it broke U.S. antitrust laws.

As expected, similar reasons were also given in a separate filing of an 88-page summary judgement asking U.S. District Court Judge Thomas Penfield Jackson to throw out the case.

The key point emphasised in both the 33-page preliminary injunction response as well as the motion to dismiss is the Appellate Court ruling, which Microsoft claims backs its long held belief that Windows 98 and Internet Explorer are a single, integrated product - thereby rendering the government's tying charges moot. "In light of the decision by the Court of Appeals, it seems likely this case can be resolved without the need for an expensive and time-consuming trial," Microsoft counsel Bill Neukom said in a statement.

As part of its defence and a reason for dismissing the case, Microsoft pointed to Internet product integration by other operating system vendors such as IBM, Sun Microsystems and Linux providers as proof that it is not the only vendor to integrate Internet technologies into the operating system. To this claim, Microsoft added that its goal was to benefit customers, not harm competitors. In its filing, Microsoft said that the integration of IE and Windows 98 brought with it such capabilities as HTML Help and multimonitor support - in addition to Web browsing functionality.

Added rationale for dismissing the case is the claim that Netscape has not been harmed or hampered by Microsoft in the distribution of its browser software. The filing by the company claims it never forced OEMs, ISPs or Internet content providers from supporting or distributing Netscape's products. It also points out that none of its contracts were exclusionary and that some of the provisions it had with ISPs and ICPs were waved. In addition, Microsoft also attempts to "set the record straight on some of the groundless allegations that underlie the government's claims."

Rich Gray, an antitrust attorney with Californian law firm Bergeson, Eliopoulous, Grady & Gray, said Microsoft's motion for summary judgement has little chance of succeeding because such motions are only granted if there are no disputed facts. Gray says the case contains plenty of disputed facts. "This case is going to trial in September," Gray predicted. He also said Microsoft could be on shaky legal ground by repeatedly citing the Appeals Court decision because that ruling only dealt with whether the company broke a 1995 consent decree, not whether it widely violated antitrust laws. "All of this language that Microsoft is wrapping itself in actually isn't of any legal significance," he said. "A large part of what Microsoft is doing here is a PR offensive."

For example, and as expected, Microsoft said it thought of using Internet browsing technologies with Windows as early as 1992, and that public statements about its plans were made in April 1994. The anti-Microsoft lobbying group Procomp called that argument "fiction," saying that Microsoft itself acknowledged it didn't respond to the Internet until 1996. Executive director Mike Pettit cited the back cover of Bill Gates' book, The Road Ahead, which said that Microsoft "astonished the business community in 1996 by abruptly reinventing his entire company around the Internet."

"Netscape was the innovator in the browser market," Pettit said in a statement. "Microsoft could not and would not compete head to head on the merits." Instead, Pettit repeated claims that Microsoft leveraged its monopoly in the operating system market to gain a foothold in the browser market, allegations shared by the DoJ. Microsoft also slammed the DoJ for using excerpted quotes from documents that it obtained in the course of its investigation. Microsoft's filing said that "courts have routinely refused to find companies liable for attempted monopolisation based on 'aggressive-sounding language' in internal documents."

Its filing also disputes claims made by the DoJ about its 1995 meeting with Netscape to carve up the market, saying that "the prominence plaintiffs give to the June 21, 1995 meeting should be recognised for what it is - an effort to tar Microsoft based on an erroneous account of the facts. While efforts to cast Microsoft as a villain may be more fun and less taxing for plaintiffs than the rigorous process of establishing the essential elements of their claims, such atmospherics are no substitute for proof of anticompetitive conduct."

As a final point, Microsoft's filing also said its success in the browser market was based on product quality and had nothing to do with its integration into Windows. The DoJ and attorneys general from 20 states filed an antitrust lawsuit against the software giant in May. Netscape's general counsel Roberta Katz took aim at Microsoft's contentions. "Look closely at Microsoft's use of words," she said. "For example, they say that when they became first interested in the Internet that they intended to bundle Internet technology. But they didn't' say they intended to bundle Internet browsing technology. "Here's this great big software company with 20,000 employees and here we were this little company with 100 employees," she continued. "We were able to build it -- and they couldn't build it? They pride themselves on being great innovators. What happened?

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