Justice Department joined by 20 states in unfair-practices litany

The US Justice Department and 20 US states plus the District of Columbia charged in their antitrust lawsuits this week that Microsoft, the world software leader, had "engaged in anti-competitive and exclusionary practices".

These were "designed to maintain its monopoly in personal computer operating systems and to extend that monopoly to Internet browsing software".

The Justice Department complaint alleged:

In May 1995, Microsoft executives attempted to persuade Netscape Communications, a pioneer of Internet software, not to compete with Microsoft and to divide the browser market, with Microsoft making software for users of Windows, and Netscape, becoming the sole supplier of browsers for non-Windows computers.

Netscape refused to participate.

Microsoft forced personal computer manufacturers to install its browser, Internet Explorer, as a condition of obtaining licences for the Windows 95 operating system.

Microsoft now intends to tie licences of its Internet browser software to its new Windows 98 operating system, the successor to Windows 95.

Microsoft is misusing its Windows monopoly by requiring PC manufacturers to agree to conform to a uniform "first screen" specified by Microsoft.

This determines the images that all PC users see when they turn on their computers. Microsoft's restrictions forbid any changes that would remove from Microsoft's browser or add to the competing software in a more prominent manner.

Microsoft has entered into anti-competitive agreements with the largest online services, such as America Online, as well as Internet service providers. In return for promoting these services on Windows, these companies have agreed not to promote Netscape's browser software.

Although Microsoft has sought to modify some of these agreements the modifications are themselves unlawful, because they still restrain competition, the Justice Department said.

The antitrust regulators sought an immediate court order forcing Microsoft to stop these alleged "exclusionary and restrictive" practices.

Mr Joel Klein, the head of the Justice Department antitrust division, said the injunction could be obtained in time to "give consumers greater choice in the near future".

Ms Janet Reno, the US attorney-general, said: "Consumers and computer manufacturers should have the right to choose the software they want installed on their personal computers. We are acting to preserve competition and promote innovation in the computer software industry."

Regulators did not attempt to obtain an order halting shipments of Windows 98.

This, they said, would have limited consumer choice. Instead, the Justice Department demanded:

Microsoft either remove its own Internet browser from Windows 98, a new version of the Microsoft PC operating system. Alternatively, Microsoft could distribute with each copy of Windows 98 a copy of Netscape Communications' rival Internet browser.

Microsoft end its practice of forcing PC manufacturers to install the company's Internet browser as a condition of installing Windows on their products. Users should have a choice of browsers.

Microsoft should remove the "competitive shackles" placed on PC manufacturers that prevent them from controlling the "opening screen" that appears when a PC is turned on.

Microsoft must drop "exclusionary" agreements with Internet service providers, online services and Internet publishers that force them to promote Microsoft products.

In addition, the states charged that Microsoft had leveraged its market power to extend its hold over the market for business applications.

The company forced PC makers to install Microsoft Office, its range of business applications, the states' allege in their lawsuit.

Microsoft internal memos, obtained by the Justice Department during its investigation, were quoted throughout the complaint.

The government argued that these documents demonstrate that Microsoft believed it could not win the "browser war" with Netscape through competition on the merits of its product.

Microsoft's Mr Christian Wildfeuer wrote in February 1997: "It seems clear that it will be very hard to increase browser market share on the merits of IE4 [the latest version of Microsoft's Internet browser] alone. It will be more important to leverage the OS [operating system] asset to make people use IE instead of Navigator."

In a statement from its Redmond, Washington, headquarters, Microsoft said the antitrust suits were "without merit" and vowed to fight them in court. "We believe these lawsuits are without merit and will hurt consumers," the company said.