Netscape Seeks Government Probe Of Microsoft Letter To Justice Department Outlines Series Of Alleged Violations

Netscape Communications Corp. wants the Justice Department to investigate whether Microsoft Corp. is violating an agreement with the government by trying to push out Internet software competitors.

In a letter to antitrust regulators, Netscape detailed a litany of potential violations by Microsoft to its 1994 agreement. The government has not formally responded to the Aug. 12 letter, which was provided to news organizations Tuesday by Netscape.

Netscape said Microsoft is using its dominance in personal computer operating systems to influence computer makers, Internet service companies and others into giving Microsoft Internet software greater prominence over competitors like Netscape.

For instance, the letter said, Microsoft is charging less money for its Windows 95 operating system to PC makers who agree to make other Web browser programs less accessible to computer users.

The tactic prompted Hitachi to drop a program from a new laptop computer because the software included Netscape’s Navigator Web browser, the letter said.

“If estimates are correct that Windows 95 is selling at a rate of 40 million copies a year, it will cost (PC makers) more than $100 million a year to offer their customers non-Microsoft Internet software on an equal footing with that of Microsoft,” the letter said.

In 1994, Microsoft settled antitrust charges by agreeing to halt a discounting practice that discouraged PC makers from installing operating systems of other software makers into their machines.

Netscape said immediate action is needed to prevent Microsoft from using its dominance of operating systems to block the growth of Internet software competitors.

Netscape attorney Gary Reback, who wrote the letter, said he has not heard from the Justice Department.

“They’ve had it for a week,” Reback said.

A Justice Department spokesman said it had no comment on the letter.

A spokeswoman for Microsoft said the letter contained “wild and unsubstantiated statements.” But she declined comment on its details and said the company was still examining it late Tuesday.

The rivalry between Netscape and Microsoft has become the most intense in the software industry, due to the increasing popularity of the World Wide Web.

Microsoft dominated the business after its MS-DOS and Windows operating programs became popular for running basic operations of a PC. That allowed it to influence how other software was created and data was organized.

But Netscape’s dominance in Web software - its Navigator browser is used by more than 80 percent of Web surfers - worries Microsoft because the Internet is prompting software developers and computer system designers to rethink how data is organized and used. Eventually, their ideas and products may rely less on Windows as a design standard.

To catch up, Microsoft has publicly forged deals with a number of on-line companies, including CompuServe and America Online, to feature Microsoft’s Explorer browser instead of Netscape’s. In return, Microsoft plans eventually to combine the software needed to access those services into Windows 95.

Netscape is worried the antitrust division doesn’t have enough people or resources to look into Microsoft’s actions in a timely fashion and suggested the Federal Trade Commission might be better equipped to investigate.

“In any event, we are requesting immediate action,” Netscape said in the letter.