U.S. Seeks Microsoft Sanctions

WASHINGTON -- The U.S. Justice Department asked a federal court Monday to hold computer software giant Microsoft Corp. in contempt for requiring personal computer manufacturers to license and distribute its Internet browser.

U.S. Attorney General Janet Reno announced the action at a news conference at the Justice Department.

Microsoft's stock immediately turned lower with the announcement, and the stock of its chief rival for such software, Netscape, moved up.

The Justice Department said the company's action violates a 1995 court order the government obtained to bar the company from anticompetitive licensing practices. "Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly," Reno said.

The department asked the U.S. District Court to fine Microsoft $1 million a day until it stops requiring PC manufacturers to accept Internet Explorer as a condition of receiving its Windows 95 operating system.

"This is a very serious abuse," said Assistant Attorney General Joel Klein, head of the antitrust division. He said Microsoft's action was designed to undermine the dominate market position of its major competitor for Internet browsers, Netscape.

Internet browsers are important, Klein said, because that "could erode Microsoft's operating system monopoly" in the Windows operating system.

"This kind of product forcing is an abuse of monopoly power and we seek to put an end to it," Klein said. He emphasized that the Justice Department is still investigating other practices by Microsoft, whose software is marketed worldwide, but declined to detail them.

The Justice Department objected to Microsoft's requirement that computer manufacturers who want to license Windows 95 also license its Internet browser, known as Internet Explorer. Most personal computer makers install Windows 95 at the factory.

Klein said, "These are two different products." He said they should be sold as two separate products, but he adamantly said the government was not taking sides in the war for browser market share between Microsoft and Netscape.

"Each of Microsoft's products should compete on its own merits," he said.

A Microsoft spokeswoman in Seattle said the company had no immediate comment on the matter.