Two more antitrust suits hit Microsoft
By Dan Goodin
Staff Writer, CNET NEWS.COM
February 19, 1999, 7:25 p.m. PT
Already fighting antitrust battles on three fronts, Microsoft this week was slapped with two
sweeping class action lawsuits accusing the software giant of suppressing competition in the
markets for personal computer operating systems and applications and engaging in other
predatory conduct.
One of the class actions--brought in the same Washington, DC, federal court where the Justice Department and
19 states are now prosecuting Microsoft in a high-profile antitrust suit--also names Compaq
Computer, Dell Computer, and Packard Bell NEC for allegedly conspiring with the Redmond,
Washington, company to profit from its alleged monopoly.
Filed on Tuesday, the suit is brought on behalf of Gravity, a Fort Worth, Texas, maker of document management
software. It accuses Microsoft and the three PC vendors of limiting buyers' choice of operating systems and
applications and keeping prices for those products artificially high.
In a separate lawsuit filed yesterday in San Francisco Superior Court, a San Jose, California, man who purchased
an Intel-based computer last year is accusing Microsoft of blocking superior operating systems from hitting the
market and of charging monopoly prices, in violation of California antitrust law. The suit does not name any other
party as a defendant.
A Microsoft spokesman denied the allegations.
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With a few exceptions, both lawsuits are nearly identical. Both draw liberally from evidence and charges already
heard at Microsoft's antitrust trial. Both actions allege a broad series of illegal conduct, including attempts to crush
Netscape Communications' Navigator browser and Sun Microsystems' Java programming language.
But the suits go well beyond the scope of the trial by raising other allegations. For instance, both claim that
Microsoft illegally prevented a now-defunct operating system known as DR-DOS from coming to market, while
one of the actions also alleges the company keeps certain application programming interfaces secret in order to
give its applications an leg up over competing products.
"Microsoft's exclusionary and restrictive practices ... have caused significant harm to class members by increasing
the price they have paid for Microsoft's Windows operating, Word and Excel
software above competitive levels and/or by denying them a free choice in a
competitive market, as well as the benefits of software innovation," one of the suits
alleges.
A Microsoft spokesman said the company had not yet been served with either
complaint, but had had a chance to review one of them. "Based on a cursory review,
the suit appear to be nothing more than an exercise in plagiarism of other lawsuits,
including the DOJ's lawsuit," company spokesman Tom Pilla said. "We look forward
to responding with the facts."
Representatives from Compaq, Dell, and Packard-Bell were not immediately
available for comment.
Both lawsuits seek class-action status, so that other computer buyers can sign on as
plaintiffs. The biggest difference between the two actions is that the one filed in federal
court names the three PC makers as co-conspirators.
"Microsoft has conspired with Compaq, Dell and NEC to monopolize the relevant
market for personal computer operating software, the relevant market for personal computer word processing
software, and the relevant market for personal computer spreadsheet software," the complaint claims. "The named
co-conspirators earn substantial monopoly revenues to distribute Windows operating, Word, and Excel
software."
That suit goes on to claim that the PC manufacturers participate in Microsoft's alleged predatory conduct by
refusing to offer computers that do not carry Windows. The practice has come under fire lately by Linux operating
system users, who say it is unfair they should have to pay for Windows if they don't want to use it.
This week's class actions mean Microsoft is now fighting antitrust charges on at least five different fronts. In
addition to the antitrust trial pending in Washington, the software giant is also defending suits filed by Caldera and
Bristol Technology. Two other companies, Sun and Blue Mountain Arts accuse Microsoft in court of unfair
business practices.
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