Second inquiry into Microsoft: Justice Department looks into allegations of anti-competitive action

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The Independent Online
WASHINGTON - (Reuter) Microsoft, the giant American computer software group, confirmed at the weekend that the US Department of Justice has launched an inquiry into alleged anti-competitive behaviour by the company. The move comes soon after the Federal Trade Commission dropped its own similar investigation.

Bill Neukom, Microsoft's lawyer, said the company would co-operate fully with the Justice Department.

'We are gratified that after a very thorough investigation, conducted over a period of 38 months, the FTC concluded that no further action is warranted by the commission at this time,' he said.

Gina Talamona, a spokeswoman for the Justice Department, said it would use the material submitted to the FTC to avoid duplication. Microsoft has repeatedly denied any illegal activities or wrongdoing. Last month, Bill Gates, the chairman, insisted: 'There has been nothing that has come up that causes us the slightest concern' in the lengthy FTC investigation.

But within 24 hours of the decision to drop the inquiry, the Justice Department began looking into whether it would take over the case from the FTC, which had twice produced 2-2 votes this year about taking action against the software maker.

FTC staff were initially concerned with an alleged anti-competitive horizontal agreement between Microsoft and IBM in November 1989. The two have now gone separate ways, but in April 1991 Microsoft learnt the inquiry had broadened to include third- party complaints that it had sought to monopolise the market in operating systems, software and peripherals.

Microsoft supplies the MS-DOS operating system software which, along with Intel's microprocessors and IBM's PC standard, has transformed the computer industry.

Allegations the FTC is believed to have considered include claims that Microsoft's discounts to customers who paid a per-unit fee for use of MS- DOS on high-volume PC configurations stifled competition.

Other allegations believed to have been under review were that Microsoft may have used other methods to discourage use of competing operating systems or to make its own applications work better on the operating system needed to run them.

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