State leaders discuss Microsoft

The Associated Press
Thursday June 21, 2001

WASHINGTON — The state attorneys general who pursued the antitrust case against Microsoft are privately discussing a new lawsuit, concerned that the software giant’s latest products will unfairly hamper competition, two leaders say. 

Attorneys General Richard Blumenthal of Connecticut and Tom Miller of Iowa said they’re particularly concerned about Microsoft’s plans to bundle new features into its Windows XP operating system, due out this fall, and to offer new Web-based subscription services. 

“Microsoft seems to be using much of its power to preclude competition on a new platform,” said Miller, who organized the 19 attorneys general who joined the Justice Department in the current antitrust suit. 

“This is what they did before and this is what they’re doing again to maintain their monopoly,”  

Miller said in an interview with The Associated Press. 

Blumenthal said the states were discussing the possibility of a second lawsuit as one of several options, even as the current case awaits a ruling in federal appeals court. 

“We haven’t reached a point where we’re discussing it publicly,” Blumenthal said.  

“We have been exploring strategies, consulting experts, doing legal research. Generally preparing.” 

Another option, according to Miller and Blumenthal, is to bring up concerns about the new products as part of the current case if the appeals judges send it back to a lower court. 

Microsoft chief executive Steve Ballmer is in Washington this week, meeting with congressional leaders and Vice President Dick Cheney.  

The White House said the antitrust case didn’t come up in the Cheney meeting. 

The company says any talk of additional litigation is premature since most of the products cited by critics aren’t even finished yet. And it says its goal isn’t to monopolize but to give customers want they want. 

“The key point in this whole process is that users decide if they want to use Web services and what information they want to give,” Microsoft spokesman Jim Cullinan said. 

The nation’s attorneys general are meeting in Vermont this week for their annual conference. A group backed by Microsoft’s rivals made a presentation Wednesday in an effort to persuade the states to file a second antitrust suit to stop Microsoft’s new products. 

The group, called ProComp, includes Oracle, Sun Microsystems and Netscape, a subsidiary of AOL Time Warner. ProComp director Mike Pettit wrote a 59-page paper criticizing Microsoft’s practices. 

Blumenthal said the competitors’ concern that Microsoft may try to extend its market dominance is valid. 

“They certainly raise the prospect, if not the probability of the same dangers and potential harms that resulted from past practices that were proved at trial,” Blumenthal said. 

Miller agreed: “It sounds at least on the surface to be very familiar as to the maintenance-of-monopoly case that we’ve had.” 

Blumenthal said the attorneys general also are prepared to continue to pursue their case against Microsoft even if the Bush Justice Department seeks to settle the current case. 

“We have never said that the Justice Department was an essential partner,” he said. “Certainly a critically important one, but never a prerequisite to our pursuing the case. We are absolutely determined to pursue this case.” 

Last year, U.S. District Judge Thomas Penfield Jackson ordered Microsoft broken in two for antitrust violations. He concluded the company unfairly tied its Windows operating system to its Explorer Web browser in order to gain and keep a software monopoly. 

Microsoft appealed to the federal appeals court in Washington, and awaits a decision. 

Windows XP, due to be released in October, will enhance the company’s recently announced Internet initiatives, called Hailstorm and .NET. The company’s new philosophy is to encourage customers to store their data on the Internet, accessible from anywhere on any device. Hailstorm and .NET rely on Microsoft’s software architecture on network servers, desktop computers and handheld devices. Windows XP, too, will offer for free many new features that competitors charge for. 

Over the weekend, Microsoft and AOL stopped negotiating how to place AOL’s software on Windows XP, leaving open the possibility that AOL might sue its rival. 

Cullinan said one reason the talks broke down is that AOL would not preclude legal action. “There’s no way we were going to include them in Windows XP if they were going to sue us over Windows XP,” Cullinan said. 

AOL vice president John Buckley said his firm didn’t want to give up its right to sue, although he said that doesn’t mean AOL has such plans. 


On the Net: Microsoft: http://www.microsoft.com 

ProComp: http://www.procompetition.org