DOJ seeks Microsoft fine
Microsoft stands in contempt of 1995
consent decree, Justice's Reno says
October 20, 1997: 2:48 p.m. ET
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Department of
Justice
Microsoft
Netscape
NEW YORK (CNNfn) - The U.S. Justice
Department Monday asked a federal court to hold
Microsoft Corp. in contempt for alleged
anti-competitive behavior in the Internet browser
market.
In a surprise move, the agency's antitrust division
charged the nation's largest software company
violated a 1995 consent decree by trying to use its
leverage to require PC manufacturers to license and
distribute Microsoft's Internet browser, Internet
Explorer.
"Forcing PC manufacturers to take one Microsoft
product as a condition of buying a monopoly product
like Windows 95 is not only a violation of the court
order but it's plain wrong," said U.S. Attorney
General Janet Reno. (156K WAV) (156K AIFF)
At an afternoon press conference, Reno said the
government will ask a federal court to impose
penalties of as much as $1 million-per-day on the
software giant.
The 1995 consent decree was aimed at barring
Microsoft from imposing anti-competitive terms in its
contracts with computer equipment manufacturers
that preinstall Microsoft software.
The unexpected announcement from U.S. Justice
Department's antitrust division had an immediate
effect on trading in Microsoft's stock.
After gaining more than 3 points, the stock
(MSFT) was down 3-1/4 to 129 following the press
conference. Meanwhile, shares of competing
browser company, Netscape Communications Corp.
(NSCP), shot 6-7/16 points higher to 41-3/8.
"This action is unfortunate and misguided," said
Microsoft spokesman Mark Murray. "The facts will
show that Microsoft is in full compliance with the
consent decree."
In addition, the Justice Department will ask the
federal court to limit the authority of all
non-disclosure agreements that Microsoft requires of
its business partners, said Joel Klein, assistant
attorney general.
"Since we have no way of knowing whether these
agreements have deterred people from voluntarily
coming forward with information ... and we've heard
this might be the case ... we want to clear the air
once and for all," Klein told reporters. (269K WAV)
(269K AIFF)
The move is the latest in a series of clashes
between Microsoft and the Justice Department.
Microsoft was previously investigated for bundling
its online service with its operating system but the
probe was later dropped.
Mountain View, Calif.-based Netscape, which
makes the popular Navigator and Communicator
browsers, declined to immediately comment.
-- Robert Liu
U.S. Attorney
General Janet Reno
Asst. Attorney
General Joel Klein
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