Stakes Huge In Netscape Vs. Microsoft It’s David And Goliath In Legal, Political Battle

Is it time to break up the Microsoft monopoly? If what Netscape claims is true, that could become a huge and legitimate political question.

After all, the future of computing in general, and the Internet in particular, may be at stake.

The feisty startup company, best known for its popular Web browser, has accused Bill Gates & Co., in effect, of illegally bribing companies to dump Netscape’s Navigator for Microsoft’s Explorer. They said Microsoft wants to run its Internet competitors out of business, just as it has marginalized other software and operating-system vendors.

Among the charges, contained in a letter to the Justice Department, was that Microsoft was paying companies $5 a copy to get rid of Navigator. PC makers, meanwhile, are being charged another $3 for Windows 95 if they choose to include Navigator in their bundle.

According to the letter, Internet access providers have been offered free hardware, software and advertising if they make Explorer their exclusive browser.

All these arrangements are buried from the public by non-disclosure agreements, according to the letter. Total value of these “incentives” to access providers: an alleged $100 million. Pocket promotional change for Microsoft, unaffordable by Netscape.

This is nasty, explosive stuff, presumably retrievable via subpoena if true. It is also the kind of allegation comprehensible to the average judge and juror, unlike the purely technical twiddling that Microsoft has been accused of using against competitors over the years.

To head off litigation, a while back Microsoft signed a consent decree barring certain licensing practices, to avoid precisely the kind of documentable financial blackmail that is being alleged. It was with respect to operating-system sales. Of course, Microsoft had already crushed Digital Research, which was selling an alternative to DOS.

At the time, many thought the decree amounted to little more than a slap on the wrist. Doubters included the federal judge in charge of the case, Stanley Sporkin, who tried and failed to kill the deal in favor of something more robust.

Now, though, San Francisco Bay Area attorney Gary Reback wants the department to enforce it on behalf of Netscape, which is an interesting legal strategy. Netscape Navigator, because it can support applications, has in effect become an operating system, he says.

Long term, it’s a huge threat to Microsoft’s monopoly of operating systems and applications. Accept that, he told me last week, and the legal issues are clear (which, of course, Microsoft denies).

If the Justice Department is serious, subpoenas to computer manufacturers, service providers and others could go out in a matter of weeks.

They may not. What comes next lies in the realm of the political rather than legal. The climate in Washington, D.C., is more Microsoft-friendly than it has been in years. The pursuit of Microsoft was the result of peculiar circumstances.

Originally, the Clinton administration looked like part of a pro-Internet, proApple, anti-Microsoft cabal. Apple’s John Sculley was the administration’s favorite capitalist, and the White House itself was junking its PCs in favor of Macintoshes. Al Gore was touting the wonders of UNIX and the Internet.

Against that background, trust buster Anne Bingaman was appointed to the Justice Department, and quickly grabbed jurisdiction over Microsoft from the Federal Trade Commission. She got the consent decree and forced Microsoft to back off its planned acquisition of Intuit.

The trade press, which generally behaves like a wholly owned subsidiary of the Microsoft/Intel monopoly, can be expected to support Microsoft’s point of view, as will most of the analysts and consulting firms who make their living being nice and pumping up tech stock prices.

The People? Most people love the Internet and Netscape - irrationally, perhaps, but love them they do. They’re less enthusiastic about Microsoft. They’re constantly irritated by the Microsoft Network icon that Bill Gates installed permanently on their desktops, and they were upset at the way Windows 95 automatically trashed competing Web browsers.

Depending on how you’re counting, that’s 10 million to 20 million angry users - and voters. Convince them that Microsoft is out to take over the Internet and they could demand action.