US justice department uncovers fresh claims against Microsoft

The US justice department has continued to uncover what antitrust enforcers believe is evidence of the same types of monopolistic…

The US justice department has continued to uncover what antitrust enforcers believe is evidence of the same types of monopolistic behaviour that got Microsoft into legal trouble in the first place, according to documents filed in federal court.

On Friday, the government formally proposed that Microsoft be split in two.

In the 200 pages of documents accompanying the plan, the justice department and 17 states and their experts alleged that Microsoft doctored the newest version of its operating system - Windows 2000, a product for powerful personal computers known as servers - so competing server companies could not take advantage of new functions.

Ms Rebecca Henderson of the Massachusetts Institute of Technology alleges that the Windows 2000 Professional personal-computer operating system "offers a significant number of functions that can only be implemented if the consumer is using a server running a Windows 2000 server operating system".

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Among the most potentially damning of the evidence is a Microsoft e-mail that was written last July, less than a month after the anti-trust trial concluded.

The e-mail, written by Microsoft's chairman, Mr Bill Gates, allegedly directs Microsoft employees to redesign software to harm competitors.

US District Judge Thomas Penfield Jackson, who last month found Microsoft had violated antitrust law and must now consider remedies, has to decide whether the government can use new evidence as part of the justification for a plan to split Microsoft into a company that sells the Windows operating systems and another company that sells applications software and other products.

Even if Judge Jackson denies the government the opportunity to inject the new evidence, the new material still could become fodder for additional legal action by the government even as Microsoft fends off the current lawsuit.

The inclusion of the new information into the filings has prompted an angry response from Microsoft officials, who said including the new evidence would be foul play, out of bounds and an example of the overzealous tactics the government has used against the company from the start.

"The government is seeking to try a whole new lawsuit involving products, competitors and interests that were not involved in any way in the case that was tried," said Mr Bill Neukom, Microsoft's top attorney.

Company spokesman Mr Mark Murray said the tactics had nothing to do with the original case, which Microsoft said was about the tying of the Internet Explorer browser into the Windows operating system.

Thus, if the judge accepts this evidence Microsoft will need more time in court to scrutinise it, Mr Murray said.

"You do have to question the appropriateness of the government rummaging through thousands and thousands of documents that were provided in the course of other issues and then pull out one or two and make them the centrepiece of a filing in a case on totally unrelated issues," he said.

But Mr Herb Hovenkamp, co-author of an anti-trust treatise often cited as a legal authority, said that Supreme Court precedents permit the inclusion of new elements to a case in determining liability.

Government attorneys and their experts said these new examples were precisely analogous to earlier illegal behaviour outlined in Mr Jackson's two-part verdict: that Microsoft had used its monopoly power and engaged in tactics designed to protect the Windows monopoly.

"If Microsoft is permitted to build upon the fruits of its victory in the browser war and to continue its campaign of anti-competitive conduct, consumers will be greatly harmed," Mr Henderson said. "Microsoft's control of the PC operating system gives it both the incentive and ability to crush any software that threatens to facilitate the erosion of the application barrier to entry."