Microsoft Subpoena Withdrawn But Justice Continues Probe Of Company’s On-Line Plans

The Justice Department unexpectedly withdrew a civil subpoena Friday involving Microsoft Corp.’s proposed on-line service, citing the company’s delays in producing documents while speeding ahead with the launch of the Windows 95 software.

The government said it will draw upon information it has already gathered in deciding whether to halt the sale of the product on antitrust grounds.

At issue is whether the company’s plan to include a program for accessing its new on-line service in Windows 95 would give it an unfair advantage over rivals.

Companies like America Online, CompuServe and Prodigy must pay PC makers to install their software or distribute it in other ways, such as through magazines or store.

The government’s latest move provides no clear indication whether it will bring an antitrust case. But it removes a legal distraction, allowing more of the department’s attorneys and resources to focus on the main issue.

“I would view this development (as consistent) with course of conduct in which they would take an action,” said Gary Reback, a Silicon Valley attorney who represents technology companies critical of Microsoft.

The pace of the Justice Department investigation hasn’t slowed, according to executives and attorneys at the three major on-line services.