US Justice Department tries to nail Microsoft with e-mail

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The US Justice Department yesterday produced new evidence in an effort to bolster its anti-trust case against the computer giant, Microsoft. Mary Dejevsky in Washington reports on progress of the lawsuit.

The new evidence cited by the Justice Department is an internal Microsoft e-mail dating from 1996. It was sent by Jim Allchin, a company executive, who asked how the company could possibly gain a bigger market share for its Internet Explorer software - the Internet browser that was then losing out to a rival product from Netscape Communications.

Mr Allchin is quoted as saying: "My conclusion is that we must leverage Windows more. Treating IE [Internet Explorer] as just an add-on to Windows which is cross-platform is losing our biggest advantage - Windows market share."

The memo appears to support the US government's case that Microsoft threatened to withhold its products from computer manufacturers who would not incorporate Internet Explorer with Windows software.

The record of the e-mail was among new papers filed by the Justice Department with the US District Court in Washington late on Thursday. The department's anti-trust division asked the judge for a quick ruling that Microsoft broke the terms of a two-year old Federal Court order designed to prevent Microsoft's domination of the computer software market becoming a monopoly.

Mark Murray, a Microsoft spokesman, said he had not yet reviewed the latest evidence supplied by the Justice Department, but implied that it had misinterpreted the e-mail. The communication proved only that an executive had made a proposal. It did not prove that using the leverage of Windows to squeeze out other Internet browsers had been even considered, let alone made company policy.

In its latest filing, the Justice Department also took issue with Microsoft's earlier defence. Soon after receiving notice that it was being sued for breaching the terms of a 1995 court order, Microsoft insisted that the court order specifically allowed it to develop "integrated software" - software that would be incorporated into computers before sale to make up a complete hardware/software package.

The new government papers accuse Microsoft of using the court order retrospectively. "The basic fallacy in Microsoft's position," it says, "is that it confuses ... the court order's prohibition on coercive marketing practices with the assurance of the proviso that Microsoft will be free to develop new, integrated products."

In other words, Microsoft was free to develop new software integrated into and sold with its Windows programme, but this did not include the browser. Microsoft says that it did.

For the US government, the suit against Microsoft is a crucial test of its power to enforce regulation. It is a pioneering attempt to preserve an element of competition in the multi-billion dollar new technology market, where Microsoft Windows has, in effect, become the world standard and any company supplying another system finds it hard to gain even a toehold in the market.