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  1. Technology
August 22, 1996


By CBR Staff Writer

Gary Reback, who doesn’t need any encouragement from Netscape Communications Corp to badger the US Justice Department about Microsoft Corp’s market behaviour, is in full spate now that he has been retained by Netscape. The anti-trust lawyer wrote to the Justice Department on August 12 demanding that it take immediate action against Microsoft for what he characterizes as far-reaching, anti-competitive behaviour. The letter was made public on Tuesday. Reback also suggested in the letter to Deputy Assistant Attorney General Joel Klein that the issue be turned over to the Federal Trade Commission for further investigation. The letter accuses Microsoft of having made written offers to computer manufacturers, Internet access providers, large corporations and others providing for either clandestine side payments, discounts on Windows, or payments in the form of space on the Windows95 desktop, on condition that the parties would make competitors’ browsers far less accessible to users than Microsoft’s own browser. The letter said Netscape had uncovered numerous additional steps that Microsoft has taken for the purpose of eliminating competition in the Internet software markets, including predatory pricing and bundling of products. Netscape reckons that Microsoft is charging $3 more per copy for Windows95 if the manufacturer places the Netscape icon alongside the Microsoft Internet Explorer icon on the desktop, according to the letter. It claims Hitachi Ltd’s Hitachi PC Corp has refused to preload Navigator on its laptop computers because it is prohibited from carrying the product under its license with Microsoft, and that Hitachi decided not to sell other software that incorporates Navigator because it breaks the Microsoft license. The letter also claims Microsoft has offered to buy out the contracts that larger Internet access providers have signed with Netscape and, in some cases, has offered up to $400,000 to other international ones not to offer the Netscape software. In one instance, Microsoft offered to pay international telecommunications customers $5 for each Navigator installation replaced with a copy of Explorer, the letter says.

Slow to a crawl

Reback also reckons that the TCP/IP limitations within the Windows NT Workstation 4.0 license infringe on the spirit and the letter of the 1994 consent decree, and claims that Microsoft withheld several key application programming interfaces that are part of NT Server and without which third-party Web servers running on NT slow to a crawl. Netscape says it was not able to release a final version of its Internet server until June because it did not have access to the two new NT Server interfaces, and that as a result, the version of the server that was on the market suffered in head-to-head comparisons between Microsoft’s and its own server software. Microsoft dismissed the letter, saying it appears to be full of wild and unsubstantiated statements. It looks to us like a marketing document masquerading as a legal document. Reback claims that the alleged practices go far beyond those that were addressed in the consent decree reached by Microsoft and the Justice Department in 1994. Justice has not formally responded to the letter, and declined comment on it; in the present lax anti-trust climate, firm action is unlikely.

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