US Report: RealNetworks accuses Microsoft

A former Microsoft executive said the software giant is trying to "create obstacles to the freedom and openness of the Internet," and accused Microsoft of not playing fairly.

Appearing before the Senate Judiciary Committee this morning, Rob Glaser, now chief executive of RealNetworks, said Microsoft is taking actions that "unless remedied, will make the computing world less friendly and less useful to customers and will slow down technical innovation significantly."

RealNetworks has pioneered the use of streaming technology to enable people to listen to broadcasts over the World Wide Web. Microsoft has taken a minor equity position in the company.

Glaser spent 10 years at Microsoft before starting RealNetworks in 1994. "Thus, it is with great personal sadness that I report that Microsoft is beginning to inject other factors into the dynamic -- using its market power to unfairly impair free competition," he said. He added that one of Microsoft's recently released products, the Windows Media Player, actually "breaks" RealNetwork's products. Glaser said Microsoft, which based its product partly on technology licensed from RealNetworks, "has chosen not to pay to update its license with us, which would allow it to use the latest versions of our technology."

Glaser added, "Instead of either licensing our new products or peacefully co-existing with us, Microsoft has instead in effect tried to stop our products from being used. In a number of circumstances where the consumer already had our product, Microsoft's product in effect breaks our product."

Glaser also said today that he notified Microsoft of the problem in April but while "in some minor respects Microsoft has addressed our concerns," in "major respects it has declined to do so. What Microsoft is doing is wrong, pure and simple. It damages our business and reputation," he said. "It's bad for consumers who depend on the quality and reliability of our products. It serves no positive purpose."

Reports today said that the Department of Justice was investigating Microsoft's actions towards RealNetworks and other companies regarding multimedia.

Following Glaser's prepared remarks, Senator Orrin Hatch of Utah, chairman of the Judiciary Committee and an outspoken critic of Microsoft, said the company has exploited and abused its monopoly power. "This is something the Department of Justice would have to take very seriously," he said.

The DOJ earlier this year filed antitrust charges against the company. A trial is scheduled for September. A spokesman for Microsoft rejected Glaser's contentions and said the company only learned about the complaints "24 hours ago. We are disappointed that Mr. Glaser chose a government forum and not the marketplace, to compete," said the spokesman. "Microsoft did not disable RealPlayer. We never heard of this until 24 hours ago. Our development team works really hard with RealNetworks to make sure the products work together."

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