States Drop Office From Microsoft Complaint

Welcome Guest. | Log In| Register | Membership Benefits

July 17, 1998 (12:00 AM EDT)

The states taking Microsoft to court over alleged antitrust activity scaled back their suit Friday, chopping out all the former allegations about inappropriate Office productivity-suite licensing and sales tactics.

In an effort to "tighten" and "sharpen" the sweeping case, the allegation that Microsoft (company profile) violated antitrust laws in marketing its widely used Microsoft Office software bundle to computer makers was dropped by the 20 states and the District of Columbia, officials said.

"The [user interface] charge is the most important to Microsoft, so my impression would be [the states] looked at the first two charges and saw they were not going to hold water," said Chris Le Tocq, an analyst with Dataquest, San Jose, Calif. "But the meaty charges are still to come."

The Office licensing charges were never part of the concurrent case being pursued by the U.S. Department of Justice.

State officials filed an amended complaint in the U.S. District Court in Washington, D.C., eliminating the Office licensing element. The suits are still set to proceed on Sept. 8. In general, they accuse the Redmond, Wash.-based software giant of stifling competition in new markets, particularly by incorporating Internet browser technologies in Microsoft's market-dominant operating systems.

In a statement, one of the lead attorneys general said the change in legal strategy would focus their case. "This allows the states to devote their full resources to preparing for the trial on Microsoft's conduct relating to Web browsers and operating systems, while continuing their investigation into Microsoft's Office productivity suites," said New York Attorney General Dennis Vacco.

"We believe that the strategy behind Microsoft's business tactics was to protect the enormous profits generated by its Windows operating system monopoly from the competitive threat posed by Internet Web browsing technology," Vacco said.

Subpoenas are being served on Microsoft executives this week as part of that continuing investigation into Office and other elements of the case, Vacco's statement said.

Microsoft said the charges never should have been brought in the first place.

Microsoft officials said they considered the states' action to dismiss the Office charges a positive step, particularly when combined with the recent U.S. Court of Appeals ruling that allowed integration of new features of the Windows OS.

The company, however, was troubled that the Office allegations were lodged to begin with, a spokesman said. He characterized the allegations as completely unfounded from the start, something that their withdrawal Friday underscored.