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Foes take Microsoft to task

Jim Barksdale of Netscape and Scott McNealy of Sun Microsystems say Microsoft must play by different rules because it is a monopolist.

WASHINGTON--Chief executives Jim Barksdale of Netscape Communications and Scott McNealy of Sun Microsystems told a Senate committee today that Microsoft must be held to a different standard because it is a monopolist.

The sentiments seemed to resonate with Sen. Orrin Hatch (R-Utah), who as chairman of the Senate Judiciary Committee convened the hearing on competition in the software industry. Following the hearing, he told reporters that Microsoft "will have to learn to live by the rules that govern monopolies."

During his five-minute presentation, Barksdale asked those attending the hearing to raise their hands if they used computers based on an Intel microprocessor. With over half of the attendees raising their hands, Barksdale then asked how many used an operating system made by a Microsoft competitor. No hands were raised.

"There is nothing wrong with being a monopoly, but as one in the PC market, [Microsoft has] to play by different rules," Barksdale said.

McNealy agreed. See special coverage: Face-off He said that, given the presence of Microsoft operating systems on more than 85 percent of PCs, the software giant is a monopolist that should be held to rules applicable specifically to companies with overwhelming market dominance.

"People argue that software is different, but it's no different than the railroad or telecommunications industries," he said. "The rules of behavior should be different for a monopoly."

McNealy challenged Microsoft CEO Bill Gates's contention that the Redmond, Washington, giant has less dominance in the PC business than IBM once had. (See related story)

"There is one huge difference: When IBM dominated the industry, information technology played a far smaller role in the economy and in the lives of our people than it does today," McNealy said. "As Microsoft seeks to leverage its operating system and application monopolies up into the enterprise, down into consumer products, and into the Internet, it has the power to affect the economy and the way we live and work that IBM, even at its zenith, never had."

Despite the two CEOs' insistence that Microsoft is a monopoly engaged in predatory practices, neither one is prepared to bring a private lawsuit backing such claims, they testified. While Netscape's chief said such a venture would be "too expensive," Sun's CEO said simply: "We do not have a case to bring right now."

Also attending today's hearing were Michael Dell, chairman and CEO of Dell Computer; Doug Burgum, CEO of Great Plains Software; and Stewart Alsop, of venture capital firm New Enterprise Associates.

Dell said it is imperative for the industry to develop standards that simplify the computing environment and drive down the cost of products for consumers. During the question-and-answer session that followed statements by those testifying, Hatch took Dell to task.

The senator cited cases in which members of his staff called Dell's customer service number and found that company employees either did not mention the option of ordering a computer with Netscape's browser already loaded or said simply that the option to ship computers with Navigator did not exist.

Dell responded that, because customers can download Netscape's browser for free, the company did not find it necessary to load Navigator on its computers.

Given Netscape's greater-than-50-percent market share, Hatch said he was puzzled at the decision not to automatically load the browser on the PCs Dell ships. "I was surprised to learn you do not offer consumers the option to load Netscape on PCs," Hatch told Dell.

Burgum, meanwhile, said companies are free to pick whatever software they deem best for their customers. He cited the way that his business application company has developed products for a variety of platforms, from Windows and Lotus to Apple Computer's Macintosh.

Dan Goodin reported from Washington and Dawn Yoshitake from San Francisco. Reuters also contributed to this report.