ARTS & FARCES internet

Beginning in the third quarter of 1997, the United States government turned its intense gaze upon Microsoft and its co-founder in earnest. On October 20, 1997, the U.S. Justice Department asked a court to fine the software behemoth US$1 million per day for violating a 1995 court order against anti-competitive behavior.

The core of the government’s case against Microsoft revolved around the software vendor’s requirement of personal computer manufacturers to bundle its Internet Explorer Web browser along with its Windows 95 operating system. One could argue an analogy of NIKE Corporation requiring the corner shoe store to carry NIKE socks, shoelaces, hats, t-shirts, and underwear if it wanted to carry NIKE shoes.

Microsoft’s main competition in the Web browser market is Netscape, which still commanded 60 percent of the market at the end of 1997. Netscape representatives indicated that it supported the Justice Department request.

For its part, Microsoft’s response was that the Justice Department was misinterpreting the court order and that the company would defend its right to add technological innovations to its products. According to Microsoft representatives, the 1995 consent decree allows the software company to integrate new features into its operating system products and that is how the software industry has always operated. Microsoft argues that its requirement of manufacturers to include Internet Explorer on systems they sell is merely Microsoft’s attempt to achieve that integration of new features and the government should just mind its own business.

The 1995 court order was a result of an extensive Justice Department investigation under then-Assistant Attorney General Anne Bingaman.

In December 1997, U.S. District Court Judge Thomas Penfield Jackson rejected the Justice Department’s request for a contempt-of-court citation and US$1 million-a-day fine. But he simultaneously ordered Microsoft to stop requiring PC manufacturers to include Internet Explorer with the Windows 95 operating system. Judge Jackson also appointed Harvard law professor Lawrence Lessig as a special master to gather additional information, examine the issues, and present his findings in the Justice Department’s antitrust case against Microsoft.

Legal observers were in general agreement that while finding that Microsoft had not violated his 1995 order, Judge Jackson firmly and clearly warned Microsoft to watch its corporate step with regard to anti-competitive behavior. Microsoft, in a somewhat peculiar interpretation, said that it felt Judge Jackson’s preliminary ruling gave the software giant a window of opportunity to demonstrate that the bundling of Internet Explorer is good for consumers.

The high-technology community’s perception of Judge Jackson’s preliminary ruling was all over the map. Word from the anti-Microsoft camp was jubilant, while Microsoft defenders took mostly a wait-and-see posture. The most level-headed members of the community saw the ruling as foreboding for the industry as a whole: Either all of Microsoft’s operating systems will include Web browser functionality—effectively putting competing browsers out of business—or the government will find itself in the business of regulating what features software companies can include in their products.

Within days of the ruling, Microsoft appealed the decision. The company argued that Judge Jackson improperly expanded the scope of the case when he issued the preliminary injunction against the browser bundling, even though he had previously rejected the Justice Department’s contempt-of-court request. “The matter before the court was whether Microsoft could be held in contempt for violating a consent decree entered in 1995,” said William Neukom, Microsoft’s senior vice president for law and corporate affairs, in a news release. “The court denied the Justice Department’s petition for contempt; the case should have ended there,” Neukom concluded.

Microsoft went on to disingenuously claim that what Judge Jackson and the government were insisting upon—removing Internet Explorer from the Windows operating system—was impossible and would create an operating system that was “degraded… deficient… [and] dysfunctional.”

Judge Jackson, at a December 19, 1997 hearing, noted for the record that his court clerk walked him through the process of removing Internet Explorer 3.02 from his computer in about ninety seconds.

The software company said it would comply with Judge Jackson’s order by offering computer manufacturers three options: a “nonfunctional” browser-stripped version; the original Windows 95 release; and the current Windows 95 release which includes the Internet Explorer browser software.

In mid-January 1998, Microsoft lawyer Richard Urowsky told Judge Jackson that the software giant should not be cited for contempt-of-court because it had carefully followed the government’s requests in its briefs to the court. Judge Jackson made it clear that Microsoft should have followed his order, not the government’s requests.

Microsoft reiterated its position that if all of the Internet Explorer files were removed from Windows 95, the operating system would fail to work. If it were required to comply with the letter of Judge Jackson’s order, Microsoft argued, it would be forced to offer a non-functioning operating system.

Justice Department attorney Phillip Malone argued that Judge Jackson’s order was broad enough to allow Microsoft ample latitude for compliance and that Microsoft was taking an “extreme and illogical course.” Malone noted that almost all Windows applications would break the operating system if they were removed in the way Microsoft removed Internet Explorer.

A Denver-based computer consultant, Glenn Weadock, demonstrated several methods of removing the Internet Explorer software by using directions included in Microsoft documentation (using Microsoft Windows 95’s Add/Remove Programs control panel). Microsoft vice president for consumer platforms, David Cole, testified that using the Windows operating system’s Add/Remove Programs control panel removes only twenty-six Internet Explorer files, retaining most of the browser software’s functionality. Cole testified that Microsoft’s marketing literature describes the process of removing Internet Explorer as “uncomplicated” and having “no adverse effects” on the operating system.

When asked, “What is Internet Explorer 3.02?” by Justice attorney Malone, Cole responded, “that is a feature of the operating system that allows you to browse the Web, among other things.” Microsoft’s position was clearly that Internet Explorer wasn’t a program or software application at all, but rather an integrated function of the operating system.

Never known for being left out of the action, the United States Senate entered the fray in early February 1998 when Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) warned Microsoft it could be risking regulation by an “Internet Commerce Commission” if it monopolizes the Internet.

“It seems far better to have antitrust enforcement today than heavy-handed regulation of the Internet tomorrow,” Hatch said, as he announced his plans for the Senate Judiciary Committee to conduct antitrust hearings centered on Microsoft. Novell, one of Microsoft’s fiercest operating system competitors, is based in Senator Hatch’s home state of Utah.

Senator Hatch’s comments provoked a quick defensive response from Senator Slade Gorton (R-Washington), who said that he found it hard to believe that his “colleague from Utah will be able to make good on the written promise he recently made to me that the ‘Judiciary Committee has no intention of interfering’ with the Microsoft litigation.” Microsoft is based in Senator Gorton’s home state of Washington.

Senator Hatch’s Judiciary Committee hearings were conducted in early March 1998. One of the most interesting developments of the hearings was Microsoft’s agreement to allow its PC manufacturer customers to talk to the Senate Judiciary Committee. Microsoft has nondisclosure agreements with its PC manufacturer customers that preclude the discussion of topics that Microsoft considers to be confidential with any third party.

A similar agreement was reached between Microsoft and the Justice Department when the government agency expressed concern that its investigation would be impeded by nondisclosure agreements between Microsoft and its customers.

In mid-April 1998, Microsoft told reporters that it would be including Internet Explorer in its Windows 98 operating system. Microsoft representatives were quoted in various publications as saying the company hadn’t been asked to remove Internet Explorer from Windows 98, only from Windows 95.

As of early July1998, Microsoft won the right to distribute Internet Explorer with Windows 95, but the software company’s problems with the Justice Department continue, with no solution in sight.