Senate schedules new hearings for Microsoft monopoly probe

The Associated Press
Wednesday July 25, 2001

WASHINGTON — The Senate Judiciary Committee will examine whether Microsoft is improperly shutting out rivals and hurting consumers, wading into an antitrust dispute as the company prepares to the new version of its Windows operating system. 

Sen. Patrick Leahy, D-Vt., the committee chairman, announced Tuesday that he will hold investigatory hearings in the fall, spurning a request from the software giant to keep Congress out of the dispute. 

Meanwhile, another Democrat stepped up pressure to stop Microsoft’s release of Windows XP, slated for October. 

“I hope (Windows XP) will be delayed by Microsoft’s own doing, and if not, by law,” said Sen. Charles Schumer, D-N.Y., a member of the Judiciary Committee. 

Schumer wrote to Microsoft chief executive Steve Ballmer, asking him to delay the release until the company changes Windows XP to make it easier for rivals to compete against it. 

If Microsoft won’t cooperate, Schumer said, he wants some of the 18 states that have sued the software giant to go to court to force a delay. 

At issue is Microsoft’s decision to bundle several new features with Windows XP that can replace software made by rivals, including programs for digital photography, instant messaging and streaming media. 

Critics, including some state attorneys general, suggest the strategy might lessen consumers’ choices and thwart free competition. 

Schumer said he’ll use the hearing this fall to ask Ballmer why the company won’t “let consumers choose the best application, rather than letting Microsoft choose Microsoft applications for them.” 

Microsoft has said it is simply trying to add features that consumers want. 

But Anthony Sanzio, spokesman for Rochester, N.Y.-based Eastman Kodak, said an early version of Windows XP forced Kodak camera owners to run Microsoft’s photo software. Sanzio also protested that Windows XP doesn’t point consumers to Kodak’s photo printing services. Schumer said his concern was sparked by Kodak’s troubles. 

Microsoft spokesman Vivek Varma said it has addressed Kodak’s concerns. Kodak’s software now appears on Windows XP, he said, and the companies are close to finalizing a photo printing deal. 

Microsoft associate general counsel Jack Krumholtz dismissed Schumer’s criticism, saying the long-awaited release of Windows XP is important to spurring a sluggish economy. 

“The timely launch of Windows XP is critical to re-ignite the PC industry in the United States,” Krumholtz wrote in a letter to the New York senator. 

Microsoft also complained that Schumer’s office canceled a Tuesday demonstration in which Microsoft was going to show him how Windows XP works. Krumholtz said Schumer canceled the meeting Monday evening and held a press conference instead. Schumer blamed the cancellation on a schedule conflict. 

Windows XP is slated to reach stores in October, but will be sent to computer manufacturers as early as August so it can be installed on new computers. 

Last week, Microsoft tried to dissuade Leahy from holding hearings. In a letter to Leahy obtained by The Associated Press, Microsoft lobbyist Jack Quinn blamed the states, saying, “The committee should not sit in judgment of particular matters or entertain hearings that promote the biases of particular litigants.” 

In June, the U.S. Court of Appeals ruled Microsoft had operated as an illegal monopoly that harmed consumers, but reversed U.S. District Judge Thomas Penfield Jackson’s order that the company be broken into two parts. 

Since then, Microsoft and the Justice Department have met to discuss possible guidelines for settlement talks. 


On the Net: 

Microsoft: http://www.microsoft.com 

Sen. Charles Schumer: http://schumer.senate.gov 

Eastman Kodak: http://www.kodak.com