The Government Sues Microsoft Again

(May 19, 1998)  The U.S. Department of Justice filed a broad Sherman antitrust action against Microsoft on Monday in the U.S. District Court in Washington, DC, with much fanfare.  Twenty states and the District of Columbia also filed a parallel suit.

The Department of Justice (DOJ) asks the Court impose a long list of restraints on Microsoft.  It seeks to compel Microsoft to include the latest Netscape browser along with MSIE, to bar Microsoft from tying the sale of its operating systems to MSIE, to bar "exclusionary practices" by Microsoft, to bar Microsoft from restricting licensees from altering certain parts of its operating system software, and many other things.

Complaint Filed by DOJ, 5/18/98.
Statement by Janet Reno, 5/18/98.
Statement by Joel Klein, 5/18/98.
Response from Microsoft, 5/18/98.

Attorney General Janet Reno stated, "Today, we are taking another step to keep our marketplace competitive. The Justice Department has charged Microsoft with engaging in anticompetitive and exclusionary practices designed to maintain its monopoly in personal computer operating systems, and attempting to extend that monopoly to internet browser software."

The Department of Justice, several state Attorneys General, and other Microsoft opponents waged a full court publicity campaign on Monday.   Attorney General Janet Reno, Assistant AG for the Antitrust Division Joel Klein, New York AG Dennis Vacco, Connecticut AG Richard Blumenthal and Iowa AG Tom Miller all spoke at a mobbed press conference at the Department of Justice in Washington DC.  Afterwards industry opponents of Microsoft held a press conference on the front steps of the Department of Justice.  Later in the day, Judge Robert Bork, who has been hired by Netscape, and other lawyers and lobbyists, held another press conference at the National Press Club.

Joel Klein alleged that:

"The lawsuit we filed today seeks to put an end to Microsoft's unlawful campaign to eliminate competition, deter innovation, and restrict consumer choice. In essence, what Microsoft has been doing, through a wide variety of illegal business practices, is leveraging its Windows operating system monopoly to force its other software products on consumers."

Microsoft issued a press release stating that the lawsuit "is without merit and will hurt consumers and the American software industry, a leading contributor to the U.S. economy."  Microsoft said it will "vigorously defend the freedom of every American company to innovate and improve its products, a principle that lies at the heart of this case."

Microsoft also said that the lawsuit "will set a harmful precedent in which government intervention into a healthy, competitive and innovative industry will adversely impact consumers and a U.S. company's ability to improve its products," and that "it appears that the lawsuit is more in the interest of a single Microsoft competitor than in the interest of American consumers."

Microsoft also announced today that it has released Windows 98 code to PC manufacturers. The product is on schedule for the June 25 consumer launch.

Bill Gates, speaking from Washington state, stated that the DOJ's demand that Microsoft include Netscape's browser was tantamount to demanded that Coke ship a six pack of Pepsi with each six pack of Coke.

Later in the day Robert Bork offered his own metaphor: "It is like a grocery store that has been told to sell only Coke, and it is now told to sell Pepsi as well."  Bork stated that "the crucial fact here is that Microsoft is a monopoly.  Everything starts and goes back to that."  Judge Bork focused his comments on Microsoft's use of "exclusionary policies."

The DOJ asserts four claims in its Complaint.

The DOJ requests a wide range of remedies, in the nature of both declaratory and injunctive relief.  It asks for declarations that various of Microsoft's alleged business practices constitute violations of Sections 1 and 2 of the Sherman Act.

The Government also asks that Microsoft be preliminarily and permanently enjoined from:

The Complaint, and the Memorandum of the United States in Support of Motion for Preliminary Injunction, can also be downloaded from the DOJ website in WordPerfect 5.0 format.