DOJ investigation of Microsoft to expand

In its race to beat the Windows 98 launch-date, the U.S.

In its race to beat the Windows 98 launch-date, the U.S. Department of Justice (DoJ) is expanding its antitrust investigation of Microsoft into the applications software arena, according to sources close to the investigation.

This week, the DOJ went back to a number of the OEMs (original equipment manufacturers) who were questioned during the initial round of depositions and made inquiries about the extent to which Microsoft separates its applications and operating systems development operations.

"Just like [California Senator Diane] Feinstein asked during the Senate Judiciary hearings about Microsoft's in-house advantage of sharing APIs (application programming interfaces) between the software side and the operating systems side, the DOJ is asking around about the same thing," said an official with an OEM, who requested anonymity.

Other sources close to the case claimed the DOJ has issued a new round of Civil Investigative Demands (CIDs) to a number of independent software vendors to request information from them on the extent to which Microsoft maintains a Chinese Wall between its applications and operating systems development organisations.

Ken Wasch, president of the Software Publishers Association, said he was not aware of any of SPA's members receiving requests for information but added, "being depositioned by the DOJ isn't something most people are willing to talk about." Wasch said he considered the DOJ investigation to be very active. "Justice is racing the Windows 98 clock," he said. "They fully understand their case becomes more complicated once Windows 98 goes to manufacturing. Once that happens, people will be less interested in Justice taking action because of their perception that it could freeze the market."

Microsoft is expected to launch Windows 98 on June 25. According to internal company plans, the company is shooting for a release-to-manufacturing date of May 1 for the product. Last week, Microsoft was close to finalising Release Candidate 1 of the Windows 98 code, said sources.

If the DOJ is seeking new information on alleged competitive advantages that Microsoft's applications divisions enjoy as a result of being allied with the operating system and development tool divisions of the company, this will not be the first time the DOJ has gone down this road. It pursued this argument during its 1994 antitrust investigation of Microsoft. That investigation resulted in the 1995 Consent Decree between Microsoft and the DOJ.

The OEM official said that the DOJ seems to be in search of fodder which it could use to leverage an additional antitrust suit against Microsoft, but he added he wasn't sure where the agency was going with its new line of questioning. "I don't think the DOJ understands what it's doing. Nothing much has been happening for the past four months. Are they just sitting back and smoking cigars?"

Microsoft did not return a request for comment by press time. An official with the DOJ public affairs department said the agency would not comment on whether new CIDs have been issued or any supposed new information that is being requested.