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Two more antitrust suits hit Microsoft

The software maker faces new cases alleging that it suppresses competition in operating systems and applications.

3 min read
Already fighting antitrust battles on three fronts, Microsoft this week was slapped with two sweeping class action lawsuits accusing the software giant of suppressing competition in the markets for personal computer operating systems and applications and engaging in other predatory conduct.

One of the class actions--brought Microsoft's day in court in the same Washington federal court where the Justice Department (DOJ)and 19 states are prosecuting Microsoft in a high-profile antitrust suit--also names Compaq Computer, Dell Computer, and Packard Bell NEC for allegedly conspiring with the Redmond, Washington, company to profit from its alleged monopoly.

Filed Tuesday, the suit was brought on behalf of Gravity, a Fort Worth, Texas, maker of document management software. It accuses Microsoft and the three PC makers of limiting buyers' choice of operating systems and applications and keeping prices for those products artificially high.

In a separate lawsuit filed yesterday in San Francisco Superior Court, a San Jose, California, man who purchased an Intel-based computer last year is accusing Microsoft of blocking superior operating systems from hitting the market and of charging monopoly prices, in violation of California antitrust law. The suit does not name any other party as a defendant.

A Microsoft spokesman denied the allegations.

The two new lawsuits are nearly identical. Both draw liberally from evidence and charges already heard at Microsoft's antitrust trial. Both actions allege a broad series of illegal conduct, including attempts to crush Netscape Communications' Navigator browser and Sun Microsystems' Java programming language.

But the suits go well beyond the scope of the trial by raising other allegations. For instance, both claim that Microsoft illegally prevented a now-defunct operating system known as DR-DOS from coming to market, while one of the actions also alleges the company keeps certain application programming interfaces secret in order to give its applications an leg up over competing products.

"Microsoft's exclusionary and restrictive practices...have caused significant harm to class members by increasing the price they have paid for Microsoft's Windows operating, Word, and Excel software above competitive levels and/or by denying them a free choice in a competitive market, as well as the benefits of software innovation," one of the suits alleges.

A Microsoft spokesman said the company had not yet been served with either complaint, but had had a chance to review one of them. "Based on a cursory review, the suit appear to be nothing more than an exercise in plagiarism of other lawsuits, including the DOJ's lawsuit," company spokesman Tom Pilla said. "We look forward to responding with the facts."

Representatives from Compaq, Dell, and Packard-Bell were not immediately available for comment.

Both lawsuits seek class-action status, so that other computer buyers can sign on as plaintiffs. The biggest difference between the two actions is that the one filed in federal court names the three PC makers as co-conspirators.

"Microsoft has conspired with Compaq, Dell, and NEC to monopolize the relevant market for personal computer operating software, the relevant market for personal computer word processing software, and the relevant market for personal computer spreadsheet software," the complaint claims. "The named co-conspirators earn substantial monopoly revenues to distribute Windows operating, Word, and Excel software."

That suit goes on to claim that the PC manufacturers participate in Microsoft's alleged predatory conduct by refusing to offer computers that do not carry Windows. The practice has come under fire lately by Linux operating system users, who say it is unfair they should have to pay for Windows if they don't want to use it.

This week's class actions mean Microsoft is now fighting antitrust charges on at least five different fronts. In addition to the antitrust trial pending in Washington, the software giant is also defending suits filed by Caldera and Bristol Technology. Two other companies, Sun and Blue Mountain Arts accuse Microsoft in court of unfair business practices.