Microsoft's legal tangles

Tangles between trustbusters and the software giant date back to the beginning of the decade, and there may be more to come.

Probes of Microsoft's business practices
1990	Federal Trade Commission begins investigating Microsoft's software marketing practices. Focuses on the possible anticompetitive nature of "tie-in" sales of applications and operating systems.
1993	Justice Department takes over the investigation.
1994	Microsoft and Justice Department reach a settlement that regulates Microsoft's marketing practices through the year 2000. Microsoft agrees that OS licenses must not contain conditions that apply to other MS software. DOJ files suit to halt Microsoft's $2 billion acquisition of Intuit.
1995	Microsoft and Intuit cancel merger plans to avoid a legal fight. U.S. District Judge Stanley Sporkin refuses to sign the '94 settlement, saying it does not go far enough. U.S. Appeals Court overturns Sporkin's decision. U.S. District Judge Thomas Jackson approves the settlement. Justice Department says that it will continue its investigation of Microsoft. Looks at whether the MS plan to bundle Microsoft Network with Win 95 is anticompetitive. Under the 1995 court order, Microsoft is prohibited from forcing computer makers to license any other Microsoft product as a condition of licensing Windows 95.
1996	Netscape files a complaint with the Justice Department, alleging Microsoft used unfair and anticompetitive practices in promoting its Internet Explorer browser. Netscape charges that Microsoft offered computer makers a $3 discount on Windows 95 software if the vendor did not install Navigator. Microsoft denies the allegation. Justice Department requests documents from Microsoft regarding its browser agreements with computer manufacturers and sellers. Justice Department asks Netscape for documents for a formal investigation of Microsoft. The investigation is still pending.
1997	State of Texas launches a formal antitrust investigation of Microsoft's business practices on the Internet. It is the first state to conduct its own probe of the software giant. Justice Department requests further information on Microsoft's plan to acquire WebTV. Says it is part of its regular review of mergers. State of Massachusetts begins an antitrust investigation of Microsoft. Justice Department asks a federal court to hold Microsoft in civil contempt for violating terms of the 1995 court order barring it from imposing anticompetitive licensing terms on manufacturers of personal computers. The DOJ seeks to impose a $1 million-per-day fine if violation of the court order continues. Texas files a lawsuit against Microsoft, charging the software giant with interfering in the state's antitrust investigation. In December, Judge Jackson issues a temporary order forbidding Microsoft from requiring Windows 95 licensees to carry the Internet Explorer Web browser. The company says it will appeal the order and allows PC makers to choose an older version of Windows 95 that is stripped of Internet features or a more updated version of the operating system with Internet Explorer. Stripping out the IE 3 files from Windows 95, according to Microsoft, would make Windows 95 inoperable. Six days after the Jackson's ruling, the Justice Department argues Microsoft "flouted" the court's order. Government attorneys again ask the judge to find Microsoft in contempt and impose a $1 million fine for every day it violates the order. Again, the case focuses on whether Internet Explorer is an integrated part of Windows or a separate product. Jackson says a court clerk uninstalled IE 3.0 in 30 seconds, but Microsoft contends that the uninstall program deletes only the icon and a few files that make the browser accessible, and that 97 percent of the IE code remains installed.
Jan. 1998	A hearing on Microsoft's compliance with Judge Jackson's ruling reveals that the company and the court differ on terms of compliance with the court order. The software giant maintains that the government gave conflicting requests on how it should obey the injunction and that it should not be found in contempt. In yet another setback for Microsoft, Jackson issues a sternly worded order denying a motion to disqualify special master Lawrence Lessig from the case. Analysts and court observers suggest that the company's aggressive legal tactics may be backfiring, which may lead the jurist to side with the government on some pivotal issues. Lessig, meanwhile, insists on his impartiality in a sworn declaration. Later in the month, the Justice Department and Microsoft announce a settlement where the company agrees to immediately provide computer vendors with the most up-to-date version of Windows 95 without the desktop icon for Internet Explorer, resolving the hotly contested contempt issue. Microsoft's appeal of Jackson's preliminary injunction is still pending, however. CEO Bill Gates says Microsoft settled its contempt-of-court charges partly because of the press ridicule it endured after offering a crippled version of Windows to satisfy a court order. Attention once again is turning to the open-ended and high-stakes question of what antitrust action will mean for Windows 98.