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Microsoft responds to suits

The software giant files a counterclaim against state antitrust regulators, charging that their lawsuits are unconstitutional.

Microsoft today filed a counterclaim against 20 state attorneys general who sued the software giant in May, charging that their suits are unconstitutional.

The software giant called the legal claims by regulators "completely groundless," marking Microsoft's first formal response to the combined antitrust charges. If successful, the counterclaim would narrow the states' charges but not dismiss them. (See related story)

"Microsoft has asserted a counterclaim against the state attorneys general, because we believe they are inappropriately trying to use state antitrust laws to infringe Microsoft's federal rights," the company said in a statement. "Like other software products, Windows 95 and Windows 98 are subject to the protections afforded by the federal Copyright Act of 1996, enacted in accordance with...the Constitution."

A spokeswoman for the New York state attorney general's office called the defense in Microsoft's counterclaim "ridiculous and grandstanding." She added: "They're trying to hide behind copyright law, and they can't."

Added Mike Pettit, procomp executive director of the Project to Promote Competition & Innovation: "Microsoft's defense is based on the false presumption that the only way the company can innovate is by tying its programs to Windows. The bottom line is that the Microsoft monopoly stifles competition, restricts true innovation, and hurts consumers."

Microsoft's counterclaim also seeks an award of legal fees fighting the May suits. In addition, the company said the following in court filings:

• It planned to integrate its Internet Explorer technologies "long before" Netscape Communications even existed, refuting the government's claim. In a conference call, Microsoft said that it has been working since as far back as late 1993 on this project.

• Microsoft claimed that its Internet Explorer browser is gaining popularity because it offers "superior technology." Netscape previously has challenged this.

• The company denied that it tried to "illegally divide" the browser market with Netscape in spring 1995. "Representatives of Microsoft met with representatives of Netscape in Redmond, Washington, on June 2, 1995, and again in Mountain View, California, on June 21, 1995, to explore ways in which the two companies could work together...Microsoft has never attempted to divide the market for Internet browser software."

• It denied government allegations that the company had entered into exclusionary contracts with Internet service providers or Internet content providers.

• Microsoft also rejected the idea that it illegally had restricted PC makers from altering the Windows desktop screen users see when they first turn on their computers. "Microsoft gives users great flexibility," the software giant said.

Many of Microsoft's arguments are not new. The company said it will provide a more detailed defense by August 10.

"We would agree that many of the arguments we are presenting are not new arguments," said David Heiner, a Microsoft attorney. "We've taken the position that every company has the right to innovate and integrate new products. The law is clearly on our side."