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Gates blasts DOJ in essay

In his broadest defense yet, Bill Gates slams antitrust regulators in an essay for the Economist.

Microsoft chairman Bill Gates has slammed federal and state trustbusters who have filed an antitrust action against his software company as "the government's lawsuit on behalf of Netscape Communications," in his broadest defense of the company to date.

In a three-page essay running in tomorrow's edition of the Economist magazine, Gates writes that his company's lawyers are "defending the legal right of every company to decide what features go into its own products."

Gates has been adamant in his criticism of regulators and the press, using every opportunity to reiterate that Microsoft has done nothing wrong, and that the company simply has made every effort to innovate, not hinder competition, in the PC marketplace. The billionaire executive has used newspaper columns, interviews, dispatches in Microsoft-owned Slate, and a crowded Senate Judiciary Committee hearing to counter what he sees as attacks on his company's philosophy and business practices.

The Justice Department alleges that Microsoft has engaged in a series of anticompetitive practices. In short, the DOJ has accused Microsoft of using its monopoly power to develop a "chokehold" on the browser software needed to access the Internet.

According to federal trustbusters, the evidence shows that Microsoft, from Gates on down, quickly realized that Netscape's Web browser posed a real threat to the Windows monopoly. The language in the suit filed by 20 states echoes the federal case.

Ironically, Gates counters in his essay, the lawsuit is attacking one of the fundamental principles that has fueled the rapid improvement in PCs--"that every company should be free to innovate and continuously improve its products on behalf of consumers, adding new features and functionality. The regulators' case centers on the claim that we integrated our Internet Explorer browsing technology into Windows in an attempt, in your words, 'illegally to counter Netscape's Navigator browser.'"

The central flaw in this allegation, Gates writes, is that there are absolutely no laws against innovating. In fact, the law says that every company--from the smallest start-up to the largest multinational--should always work to improve its products for consumers.

The government also charges Microsoft met secretly with Netscape in 1995 to divide up the market for browser software. When Netscape refused, Microsoft engaged in "anticompetitive and exclusionary conduct" designed to lock out Netscape, federal prosecutors have alleged.

Early on in the legal battle, Microsoft lawyers and Gates himself called the story "a fable." However, in his essay, Gates acknowledges the meetings existed but tries to explain them as an innocent way to discuss various technologies Microsoft proposed sharing with Netscape, "so that Netscape's browser could take advantage of the cool new features we were developing for Windows 95."

He added that after the meetings Netscape cofounder Marc Andreessen wrote in an email to a Microsoft employee saying, "Good to see you again today," which Gates refers to as "an odd sentiment given his supposed indignation over the meeting."

Moreover, "on August 24, 1995, Netscape was a featured applications developer at the Windows 95 launch event at the Microsoft campus--again, hardly consistent with the government?s claim that Microsoft threatened to withhold information about Windows 95 from Netscape," Gates noted.

The software giant's CEO writes that when you consider that Microsoft has cooperated fully with the government's investigation and provided over a million pages of internal documents and emails, it is not surprising that the government has been able to find a handful of statements that can be taken out of context to paint a misleading picture.

"Once all the facts are on the table, however, we believe these misleading snippets and the government's entire case will be seen in a very different light," he concluded.

The case is set to go back to court in September.