Sen. Hatch Seeks License Information From Software Leaders

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March 27, 1998 (12:00 AM EST)

Sen. Hatch Seeks License Information From Software Leaders

The next phase of a U.S. Senate investigation into Microsoft's business practices has begun, with four key senators asking Microsoft and rivals Sun Microsystems and Netscape Communications for cooperation.

In letters to the three companies sent Thursday, Sen. Orrin Hatch (R-Utah), chairman of the Judiciary Committee, asked each company to waive confidentiality agreements that would bar OEMs from turning over information on pacts with the software firms.

Senators, led by Hatch, have aggressively questioned whether Microsoft made unfair use of its monopoly power in PC operating systems to force, coerce, or induce OEMs to preinstall its Internet Explorer Web browser to the exclusion of rival Netscape's Navigator.

Previously, spokesmen for the committee and Microsoft said both sides were in talks over Microsoft's issuing a so-called release letter that would permit PC makers to turn over detailed agreements to congressional investigators. Microsoft officials said they were concerned that its business secrets might be compromised if the Judiciary Committee, which, unlike the U.S. Department of Justice is not bound by rules of secrecy, had unfettered access to such agreements.

A Microsoft spokesman said the company, in turn, was waiting for a letter from the Judiciary Committee promising its trade secrets would not be breached.

"Procedural rules governing the Justice Department's handling of commercially sensitive information do not, of course, apply to the Judiciary Committee," wrote Hatch in a "Dear Mr. Gates" letter to Microsoft CEO Bill Gates dated March 26. "We are, however, sensitive to the interests of Microsoft, and its contractual partners, in protecting the confidentiality of such information. We therefore would like to minimize the extent to which such sensitive information is provided to the Committee and, at the same time, provide adequate protection for any sensitive information the Committee might receive."

Hatch, in a letter also signed by Sens. Patrick Leahy (D-Vt.), Mike DeWine (R-Ohio), and Herbert Kohl, (D-Wis.), wrote that the scope of the documents requested would include "a limited number of Microsoft's contractual relationships" with major OEMs and ISPs, and that the panel would "take appropriate steps to protect the confidentiality of information which Microsoft legitimately believes is commercially sensitive."

Hatch said that no information from the pacts would be made public unless decided by him as well as Leahy, the ranking Democrat on the committee, and "reasonable notice" was given to the company.

Similar letters were sent to both Jim Barksdale, CEO of Netscape, and Scott McNealy, CEO of Sun.

In a prepared statement, Hatch said he hoped the letters would give each company reasonable assurance that their trade secrets would be protected, so that the Senate investigation could continue.

Executives from Microsoft, Sun, and Netscape were not available for comment.