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Courtroom collision looms as Microsoft
negotiations collapse
WASHINGTON (AP) -- The long-awaited courtroom collision between the government and
Microsoft appeared imminent Sunday, with the Justice Department and at least 20 states set to file
antitrust suits Monday that could change how consumers buy and use most computers.
With negotiations stalled, the world's most powerful software company in turn has pledged to flout
the two sides' differences by shipping to computer makers the latest upgrade of its flagship software,
Windows 98.
Eleventh-hour negotiations collapsed Saturday over what Microsoft described as the government's
"unreasonable demands," including a condition that the company put a copy of rival Netscape
Communications Corp.'s Internet browser in every copy of Windows, the operating system used to
run virtually all desktop computers.
"I do sometimes shake my head and wonder why this is happening. I just don't understand,"
Microsoft Chairman Bill Gates told Time Magazine. "We worked hard to settle. I wish we had been
able to. I'll seize every opportunity to do so."
One government official said Sunday that Microsoft "absolutely refused any meaningful concessions
at the end of the day."
The Justice Department and the states believe Microsoft is using its market dominance with
Windows to illegally stifle competition in other parts of the computer industry, especially the fiercely
competitive market for Internet browsers, the software people use to view information on the World
Wide Web.
Two government officials involved in the negotiations said independently Sunday that Microsoft
withdrew a major concession it had made earlier in the week, which would have given computer
makers more freedom in choosing the screen that consumers see when they first turn on the
computer.
"The Microsoft negotiators said Bill Gates had rethought it and now said that Bill Gates wouldn't
discuss it," one government official said. "That was the tenor of the talks.... It was the total refusal on
Microsoft's part to yield meaningfully. There was no question that they agreed to do some things and
then reneged."
Microsoft acknowledged it made several offers throughout the negotiations but said it withdrew
each one only after government lawyers rejected them.
"These negotiations were definitely a one-way street. We negotiated for 10 days and made offer
after offer after offer, but the government never budged an inch," Microsoft spokesman Mark
Murray said.
"We don't think a lawsuit helps anyone, and it isn't a good use of taxpayer dollars," he added. "But
in the end, it became clear that the government was simply asking for steps that were completely
unreasonable."
Also during the negotiations, Microsoft bitterly resented a suggestion that it ship a copy of rival
Netscape's browser in every copy of Windows it sells. One source familiar with the talks said that
when the government made that demand, Microsoft's stunned lead attorney, William Neukom,
repeated it aloud to make sure he had heard it right.
Reasoning that its own browser is tightly integrated with the latest versions of Windows, Microsoft
requires computer makers to install it as part of the operating system. The government defines that
restriction, under the federal Sherman Act, as "tying" the products, and says it therefore asked
Microsoft to include other browsers, including Netscape's.
Under antitrust law, a requirement that manufacturers include a competitor's product is usually
reserved for cases in which a monopoly owns the sole method of distribution, such as a vital pipeline
or electrical lines.
"It's indefensible that the government would try to force Microsoft and computer makers to give
Netscape a free ride on every copy of our Windows operating system," Microsoft's Murray said.
"Netscape clearly has a myriad of ways to distribute its product to customers. We don't think there's
any basis in law to make such an unreasonable demand." |
