US DOJ charges Microsoft contempt - demands $US1m a day in fines

In a bombshell for Microsoft, the US Department of Justice has asked a federal court to hold the software giant in contempt and to charge it $US1 million daily for requiring PC manufacturers to license and distribute the Internet Explorer browser as a condition of licensing Windows 95. The department charges that Microsoft violated a 1995 court order obtained by the US government barring Microsoft from conducting anti-competitive licensing practices. The court has also been asked to strike down parts of the non-disclosure agreements Microsoft requires of PC manufacturers, so witnesses can come forward 'without fear of intimidation or reprisal'.

In a bombshell for Microsoft, the US Department of Justice has asked a federal court to hold the software giant in contempt and to charge it $US1 million daily for requiring PC manufacturers to license and distribute the Internet Explorer browser as a condition of licensing Windows 95.

The department charges that Microsoft violated a 1995 court order obtained by the US government barring Microsoft from conducting anti-competitive licensing practices.

"Our main concern is that by violating the court order, Microsoft is using unlawful advantage to beat back an important competitive challenge to its Windows monopoly," said Assistant Attorney General Joel Klein in a printed statement. Klein, head of the department's Antitrust Division, announced the charges at a Washington, D.C., press conference yesterday with US Attorney General Janet Reno.

In its petition to the US District Court for the District of Columbia, the department asked the court to bar Microsoft from forcing PC manufacturers to accept Internet Explorer as a condition of receiving Windows 95. The petition also asks that Microsoft be required to notify consumers who buy PCs with Windows 95 that they are not required to use Internet Explorer and that they can use any compatible browser.

Microsoft also will have to tell consumers how to remove the Internet Explorer icon from their PC desktop, according to the request of the court.

Moreover, the department is asking the court to strike down sections of non-disclosure agreements Microsoft requires PC manufacturers to sign. According to the department statement, Microsoft's non-disclosure agreements might deter companies from voluntarily providing information in the department's ongoing investigation of Microsoft.

"We need a court order to clear the air here so that anyone with relevant information will feel free to come talk to the department without fear of intimidation or reprisal," Klein said in the statement. "We will not let Microsoft or anyone else burden that fundamental right."

The statement says that the department is not taking sides in the battle between Microsoft and arch-rival Netscape, nor in any emerging competition between the Windows operating system and others. Windows 95 is used on more than 80% of the country's PCs. Pre-installation on PCs is Microsoft's primary means of distribution.

Besides the federal investigation into its practices, Microsoft also is under scrutiny in at least four states. Its business practices also are being looked into by US consumer advocate Ralph Nader. The company also is being sued by rival Sun Microsystems for violating the terms of the Java licensing agreement between the two corporations.

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