States, Justice Dept. weigh lawsuits

In what could be a coordinated assault on Microsoft, the Justice Department and up to a dozen states are considering filing antitrust lawsuits on the same day, as early as next week, sources close to the matter said.

Under such a scenario, the state and federal actions--which still require approval by the heads of each jurisdictional office--would be filed as two discrete lawsuits that would be coordinated, according to the sources. For instance, the suits would be filed in Washington, take aim at similar business practices, and the various agencies would work together in gathering evidence.

Justice Department spokesman Michael Gordon declined to comment on when the agency--which has been investigating Microsoft for more than a year--might bring suit.

"We have not reached a decision," he said. "Our investigation into Microsoft's illegal use of its monopoly power is still open."

The states' collective lawsuit is still being drafted, but likely will include a request for an injunction forbidding Microsoft from tying its Internet Explorer browser to the Windows 98 operating system, which is scheduled to be shipped to computer manufacturers during the next few weeks. It was unclear whether the federal government will seek the same injunction. A federal appeals court in Washington is considering whether a similar injunction covering Windows 95 meets legal and procedural requirements.

The timing of the lawsuits now under consideration was first reported by Reuters last night.

As previously reported, 11 states--California, Connecticut, Florida, Illinois, Iowa, Massachusetts, Minnesota, New York, South Carolina, Texas, and Wisconsin--have been exchanging draft complaints that they might file against Microsoft. In recent days, West Virginia also has been added to the list. A spokeswoman for the West Virginia attorney general's office declined to comment, citing state laws requiring that investigations remain confidential.

Although the states are considering filing a relatively narrow suit for now, one source said the action could be amended to make new allegations and seek a new injunction. Possible targets include efforts to develop and market the Windows NT corporate operating system and the Java programming language, a source said.

In February, representatives from the Justice Department and a dozen states met in San Francisco to discuss the possibility of pooling resources or coordinating actions. A month later, 27 states filed a friend-of-the-court brief in the high-profile action the federal government brought against Microsoft last October.

Microsoft spokesman Jim Cullinan said it would come as no surprise if state and federal regulators investigating the software giant coordinated their activities, but, he added, "Once they review all the information, they will see this is a competitive industry where Microsoft is competing fairly."

Right now, he said, Microsoft has no contingency plans should a lawsuit seek to stop the bundling of Internet Explorer with Windows 98. He noted also that no agency has yet asked Microsoft to separate the two applications. He declined to say whether Microsoft officials were in face-to-face meetings with regulators.