Hatch takes on Microsoft, again
The Utah senator accuses the software giant of stonewalling his investigation before announcing a new round of Microsoft hearings.
In a statement on the Senate floor today, Hatch accused the Redmond, Washington, software maker of engaging in "a game of hide the ball" and deploying "a massive PR campaign grounded in spin control and misdirection" in responding to his committee's criticisms of its business practices.
He also said his committee will hold further hearings on competition in the digital age when Congress returns from its July recess. In particular, the hearings will examine the market for server software, a version of which Microsoft markets under the name BackOffice, as well as "practices and developments affecting access to, and transactions on, the Internet." He said he would announce dates and witnesses to appear later.
Microsoft spokesman Jim Cullinan said Hatch's remarks were "unfortunate and inaccurate," pointing out that competitors have themselves been spending "millions of dollars" on campaigns accusing Microsoft of anticompetitive conduct. "We think it's important for Microsoft to get the facts out there," he added.
To bolster claims that Microsoft "has continually sought to steer the committee away from important but potentially damaging areas of inquiry," Hatch released a detailed report containing numerous statements the software maker has made in the past. "At times, Microsoft has relied on factually misleading or inaccurate statements to [divert the investigation] on factually misleading or inaccurate statements," the report added.
One example included statements Microsoft chairman and chief executive Bill Gates made when he testified before the committee in early March about contracts Microsoft signed with Internet content providers such as Disney and Time Warner.
Gates told the committee that, "There is nothing that restricts anybody who has content relationships with us from developing sites that exploit" competing browsers, adding that the content partners had "lots of ways" to promote the content they designed for browsers such as Netscape Communications' Navigator.
The report said Gates's comments were "flatly contradicted by the evidence unearthed by the Justice Department," which last month filed a second antitrust action against Microsoft. The report claimed Gates had "glossed over" important details.
• Claims that Microsoft had withdrawn exclusive provisions in contracts with ISPs on a "worldwide basis," when in fact the exclusive requirements were still being enforced against the largest providers, including America Online, CompuServe, and Prodigy.
• The software giant's repeated assertion that it integrated its browser into Windows due to customer demand rather than in an attempt to "leverage Windows," a strategy outlined in a December 1996 email message sent by Microsoft senior vice president Jim Allchin.
• Gates's testimony that "it takes about five seconds...to get the Netscape browser," when in fact it takes more than two hours to download the product using a standard modem.
Microsoft spokesman Mark Murray said he was confident the company would disprove Hatch's allegations, many of which stemmed from the Justice Department's investigation. "Just as we saw this week in the appeals court ruling, the DOJ allegations aren't necessarily true or accurate," he added.
Murray disputed Hatch's contention that content providers are restricted from promoting Netscape software or online content, saying providers are free to develop separate sites that advertise competing browsers. He acknowledged, however, that certain sites such as Disney's are prevented from promoting browsers other than IE because they are listed on the Windows desktop.
As previously reported by CNET's NEWS.COM, Microsoft supporters Slade Gorton (R-Washington) and Lauch Faircloth (R-North Carolina) opposed efforts by the Justice Department to get additional funds for the antitrust division.
But Microsoft spokesman Cullinan distanced the company from last week's events in the Senate Appropriations Committee.
Gorton and Sen. Patty Murray, who both represent Washington state, have been vocal supporters of Microsoft in its antitrust battle with the Justice Department. A senator in his first term, Faircloth also recently has defended the software giant, as have a number of other legislators, though to a lesser extent.
Hatch clearly has been the most vocal critic of Microsoft on Capitol Hill. He represents Utah, which is home to some of Microsoft's fiercest competitors, including Caldera, which has brought its own private antitrust suit against the software giant, and Novell.