Double setback for Microsoft in internet battle

Microsoft, the American computer software giant headed by the billionaire Bill Gates, hit a big hurdle yesterday when its Tokyo offices were searched by Japan's Fair Trade Commission while in America it received an early setback in its high-profile court battle against the US Justice Department. Mary Dejevsky in Washington and Richard Lloyd Parry in Tokyo report.

The Japanese agency searched Microsoft's Tokyo offices on suspicion of breaking anti-monopoly laws by pressurising computer makers into pre- installing its internet browser - known in the trade as "bundling". According to FTC sources the Japanese arm of the company allowed computer manufacturers to license its Windows 95 operating system only on condition that they did not install Internet browsers created by rival software companies.

Microsoft spokesmen were unavailable last night, but company sources denied that Microsoft had broken Japanese law, and said that the inspection was "apparently aimed at gathering information in connection with the legal dispute in the United States". Microsoft Japan's president, Makoto Naruke, said the company would co-operate fully.

Meanwhile, Microsoft and the US Justice Department went back to court yesterday in the latest round of a dispute seen by the US as a crucial test of its competition policy in the new technology sector and by Microsoft as an assault on its commercial freedom.

The specific issue is whether Microsoft can be ruled in contempt because of what the Justice Department regards as its inadequate response to an earlier court judgment. This ordered it to supply its Windows 95 software to computer manufacturers without obliging them to take its Internet Explorer browser - the mechanism that allows access to the Internet. If Microsoft loses, it could be liable for fines of $1m (pounds 600,000) a day.

In court yesterday, District Judge Thomas Penfield Jackson sharply criticised key arguments presented by Microsoft. On three occasions during an opening statement by Microsoft lawyer Richard Urowsky, he challenged the attorney's focus on statements made by the Justice Department. The judge challenged Microsoft's claim that the Justice Department has been inconsistent in its demands for changes in Microsoft's marketing of its Internet Explorer browser. The judge suggested he would not accept Microsoft's effort to buttress its case by pointing to Justice Department filings, which would be a setback to the company.

Microsoft has also objected to the appointment of Professor Lawrence Lessig, a noted computer expert, of Harvard and Yale universities, and has made a formal request for his removal, alleging that he may be partial to Microsoft's chief rival in the browser market, Netscape.

Microsoft told Judge Jackson that Lawrence Lessig was biased against the company and complained that Mr Lessig compared installing a version of Microsoft's Internet explorer product "to selling his soul, presumably equating Microsoft with the devil". Mr Lessig's comment was made in an e-mail message sent last summer to an executive at Netscape Communications Corp, Microsoft's rival.

The original order on 11 December to stop bundling the two products was to take effect immediately to prevent Microsoft from expanding its dominance of the browser market, which was fast becoming a monopoly.

In a move that clearly infuriated the Justice Department, Microsoft responded by saying that it could comply only by supplying an outdated version of its Windows program or one that did not work properly because the "integral" browser had been removed. It is this response that, in the view of the Justice Department, places Microsoft in contempt.

Microsoft will argue that it is being penalised for the success of its Windows program, that the browser is an integral part of it, and that the bundling is not monopolistic because it does not preclude other companies from marketing their own browsers for use with Windows 95.

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
News
people
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
PROMOTED VIDEO
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Sport
Rhys Williams
commonwealth games
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
health
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Graduate Recruitment Resourcers - Banking Technologies

£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform