Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, June 10, 1995 TAG: 9506150005
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON NOTE: ABOVE LENGTH: Medium
At issue is Microsoft's plan to incorporate its online service, The Microsoft Network, with the new Windows 95 program. The new Windows software is expected to sell 20 million copies this year alone and will be an important selling point for personal computers this fall, industry analysts say.
Such broad distribution by the largest maker of personal computer software could give Microsoft's new online service a crucial competitive edge over America Online, Prodigy and other existing online services, critics argue.
The Justice Department issued ``civil investigative demands,'' the civil equivalent of a subpoena that marks the beginning phase of an investigation, to two leading computer online services companies, Prodigy and America Online.
Both companies complained to the Justice Department about Microsoft's plans to link its online service to the operating system software, which controls a computer's basic functions, such as activating printers or lighting up monitors.
Details of the government's investigation were sketchy.
Prodigy spokesman Brian Ek said Justice Department investigators asked his company about ``the bundling of Microsoft Network with Windows 95'' and requested comment on the merits and disadvantages of such an approach. America Online also confirmed it had received a similar demand.
Justice Department spokesman Bill Brooks said the agency is ``looking at the possibility of anticompetitive practices in the computer software industry.''
Microsoft's top attorney, William H. Neukom, declined to speculate about the outcome of the government's case and defended the linking of the online service to the new Windows as legal.
``We regret that some of our competitors, faced with new competition, have resorted to complaining to government regulators rather than competing vigorously in the marketplace,'' Neukom said.
Industry analysts speculated the Justice Department may force Microsoft to remove the online service from the Windows 95 software before the software goes on the market. That may be one reason why the Justice Department appears to have moved quickly this week; America Online and Prodigy were given just four days to comply with the government's request.
The development comes just three weeks after Microsoft scrapped a $2 billion purchase of Intuit Inc., maker of the leading finance software program Quicken, after the Justice Department filed an antitrust lawsuit to block the deal.
by CNB