To: Scrapps who wrote (16053 ) 6/15/1998 12:39:00 PM From: Moonray Read Replies (2) | Respond to of 22053
Microsoft probe grows USA Today - 06/15/98- Updated 10:15 AM ET The Justice Department is investigating whether Microsoft is leveraging its near-monopoly Windows software for desktop personal computers to get a leg up in perhaps the fastest-growing computer market: hand-held PCs. Microsoft is offering a coupon for a free copy of Windows 98 - its new operating system for desktop PCs - to customers who buy a palm-sized PC powered by Microsoft's Windows CE software by June 30. Windows 98 is an upgrade of Windows 95, which runs 90% of desktop PCs. Antitrust law frowns on using a monopoly product to gain advantages in new markets, and on predatory pricing, or selling a product below cost to lock out rivals. Justice and 20 states last month filed an antitrust case charging Microsoft with leveraging Windows 98 to gain advantage in Internet software. Lawyers familiar with the matter say Justice is now looking at Microsoft's efforts to muscle its way into software for corporate networks, hand-held PCs and cable boxes. Justice officials would not comment. The software giant's latest offer "could raise questions," says Bob Litan, a former Justice lawyer at the Brookings Institution, a think tank. "They're constantly using their existing power as a leverage tool to create a new market" in other products, says Ed Black, president of the Computer and Communications Industry Association. But Microsoft's Jim Cullinan says, "This is just a good promotion that offers incentives for people interested in getting a palm-sized computer to get another great product." Windows 98 sells for $85 to $109. Palm PCs cost $300 to $500, including Microsoft's $25 Windows CE software. Courts generally let companies package new products with dominant products in the "first few months" of a new product introduction, says William Kovacic of George Mason University Law School. But he adds, "If I were a monopolist I'd be worried." Microsoft has just entered the exploding market for palm PCs, which offer Web browsing, e-mail, and other features. 3Com, the dominant player, has sold 1 million of its PalmPilots which use its own software. But Microsoft-powered models could grab as much as 85% of the market in five years, says analyst Rob Enderle of Giga Information Group. Consumers, he says, will be drawn by its compatibility with Windows-based desktop PCs. o~~~ O