Raid on Microsoft offices in Tokyo

Japanese anti-monopoly authorities yesterday carried out an unexpected search of Microsoft's offices in Tokyo, extending the US software company's legal problems into a new arena.

Officials from Japan's Fair Trade Commission arrived unannounced and took copies of several documents relating to its dealings with personal computer manufacturers, Microsoft said.

The company, which faces antitrust charges in the US and is under investigation by European competition authorities, was surprised by the action of Japanese officials. "We were somewhat taken aback because we had previously offered to co-operate with the FTC and answer any questions that the commission might have," said Mr Brad Smith, Microsoft associate general counsel in charge of international issues.

The Japanese authorities' action came as Microsoft was preparing to face charges in a Washington courtroom of contempt of court arising from antitrust charges lodged by the US Justice Department.

Attornies for Microsoft sparred with both the judge and the Justice Department yesterday as a hearing opened in which the US government is seeking a $1 million a day contempt of court fine on the company.

The Justice Department accuses the software manufacturer of a "cynical" attempt to thwart an earlier order by Judge Thomas Penfield Jackson that it "debundle" its Internet browser from its Windows operating system.

The company responded by offering PC manufacturers an older version of Windows without Internet Explorer or a current version with the browser removed but in a form that is not fully functional.

Mr Richard J. Urowsky, for Microsoft, told Judge Jackson that the Justice Department knew that would be the result.

Mr Philip R. Malone, for the Justice Department, argued that Microsoft could simply have told manufacturers to use a simple programme within Windows 95 to remove the browser. By its actions, it "defied rather than complied with that order," he said.