August 22, 1996 6:30 PM PDT
DOJ fight hits fever pitch
Today, Microsoft posted on its Web site a harsh response to Netscape Communications' August 12 letter to the U.S. Department of Justice, saying it contains "wild and irresponsible allegations that have no basis in law or fact."
The seven-page retort from Microsoft follows several weeks of heated confrontations between the two companies, capped this week by Netscape's disclosure of a letter sent to the Justice Department. In the document, Netscape accused Microsoft of a series of anticompetitive actions, including the company's alleged use of its dominance in the operating system market to "squeeze" competitors out of the Internet space.
"Netscape's August 12 letter to the Department of Justice--and its decision to release the supposedly 'confidential' letter to the media earlier this week--is a transparent attempt to divert attention from our progress," Microsoft's posting states. "This letter is a calculated attempt by Netscape to enlist government and the media in its marketing campaigns."
In its response, Microsoft denies the Netscape claim that it offers hardware OEMs a $3 discount on Windows 95 if the original equipment manufacturer agrees to make competing browsers such as Navigator less accessible to users. "OEMs who license Windows 95 for installation on new PCs are entirely free to ship any software they like on those machines, without any effect on their Windows 95 royalties to Microsoft," the Microsoft posting states.
However, Gary Reback, the lawyer leading Netscape's antitrust crusade against Microsoft, suggested that Microsoft is playing a game of semantics. "They're playing weasel words here," he said. "[OEMs] get a $3 dollar 'marketing allowance.'"
Reback also said today that one of the hardware companies, Hitachi, that had planned to discontinue its bundling of Navigator with its Windows 95 PCs has changed its plans. Reback said that Hitachi today contacted Intuit about licensing its Quicken Deluxe package, which includes Navigator, for use with its PCs.
Hitachi officials could not be reached for comment.
Greg Shaw, a Microsoft spoksesman, today would not discuss specific marketing agreements between Microsoft and OEMs and reiterated that the company has not attempted to make Navigator less accessible. "We have marketing programs [with OEMs] just as Netscape does," Shaw said.
Microsoft also rebutted several other Netscape accusations: that it has pressured Internet service providers to distribute Internet Explorer exclusively; that it withheld APIs to Windows NT from its competitors so that it could create an advantage for its Internet Information Server Web server; and that its free distribution of Internet Explorer constitutes "predatory" behavior.
Microsoft blasted the Netscape letter as a PR ploy and an attempt to distract the market from Microsoft's progress on the Internet, including the recent release of Internet Explorer 3.0.
"Microsoft intends to focus on developing great software and widely licensing it to consumers," the posting concludes. "Netscape would do well to do the same rather than devoting resources to spreading false information about one of its primary competitors."
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