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Wednesday, 23 January, 2002, 13:50 GMT
Q&A: AOL Time Warner takes on Microsoft

Strange though it may seem now, the web's early years were dominated not by Microsoft, but Netscape.

Yet these days Netscape barely figures in user statistics, and owner AOL Time Warner, claiming anti-competitive behaviour by Microsoft is responsible for the slide, has opened legal action.

What grounds does AOL have to go to court?

In its suit, AOL Time Warner says that US federal courts have already said that Microsoft is guilty of abusing its monopoly to drive out competition.

So a request for damages of triple the financial pain it suffered from Microsoft's misbehaviour is simply a "logical extension" of the court's decisions, AOL claims.

As respected Silicon Valley columnist Dan Gillmor puts it: "Saying [AOL] have a head start - when other parties have done all the legwork, then won on the facts and the law - is like calling Picasso an OK artist."

What financial damage? Aren't browsers free to the user?

Initially, Netscape Navigator was meant to be a demo for which individual users would later pay.

Predictably, they didn't.

Former Netscape CEO Jim Barksdale
Back in the boom years, Netscape ruled the roost

Instead, most of Netscape's revenues came from businesses paying for support or for Netscape-designed servers - the high-end computers on which data including websites are stored for delivery to end users over the internet.

Netscape contends that Microsoft drove it out of the market by forcing licensees of its Windows operating system to back its Explorer browser.

That, AOL Time Warner says, crippled Netscape.

So if the courts have already made up their mind on the antitrust case, isn't this a bit of an open and shut case?

Far from it.

Microsoft's monopolistic behaviour is now a matter of record.

But the area of the "Browser Wars", as the Netscape-Microsoft battles were known, was one of the trial's greyer areas.

Netscape has always blamed its calamitous slide from 70% of the browser "market" to a generously-calculated 10% today on Microsoft alone.

Microsoft founder Bill Gates, AP
Bill Gates' anti-trust saga reaches its endgame

But one of the main charges in the antitrust case - that Microsoft's decision to tie Internet Explorer into Windows amounted to monopolistic behaviour - has yet to be entirely settled.

And, in any case, Netscape's own performance was less than stellar.

Many observers criticised Netscape for arrogance, and producing bloated, buggy software.

And versions of Netscape produced since the firm was bought by AOL in 1999 have, if anything, been even worse, critics say.

The fight by US states against Microsoft rumbles on. Of what significance are these proceedings?

While the Bush administration and nine states which also took Microsoft to court have come up with a settlement, a further nine have rejected the proposal as toothless, and proposed more stringent sanctions.

And it is through trade curbs, rather than just cash, that AOL stands to gain most, some observers believe.

Besides financial damages, AOL has said it wants to "restore competition lost in the operating system and web browser market because of Microsoft's illegal conduct".

Any more cases out there waiting to come to light?

This is the bit that has the lawyers slavering with anticipation.

AOL Time Warner is hardly the only company to suffer from Microsoft's actions.

Others which have opened actions - for instance Utah-based Caldera, which claimed the market for its own operating system was crippled by Microsoft in the 1980s - have won fat settlements.

See also:

23 Jan 02 | Business
AOL Time Warner sues Microsoft
02 Nov 01 | Business
Microsoft reaches anti-trust deal
01 Nov 01 | Business
Microsoft 'close to anti-trust deal'
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