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Microsoft Monday, 14 February, 2000, 12:46 GMT
Microsoft: The charge sheet
Internet Explorer and Netscape logos
Explorer vs Navigator was at the heart of the case
Think of Personal Computers (PCs) and the mind quickly turns to Microsoft's Windows.

It is the operating system used on 90% of desktop processors. Its domination of the information technology world has propelled Microsoft to superpower status.

But in the eyes of the US Justice Department, it is a big problem, because Microsoft stands accused of capitalising on its overwhelming domination of the market.

The company's many detractors point to a number of examples.

Privileged access

The fact that Microsoft writes the system on which most PCs operate gives it an unfair advantage over other software companies when developing software packages, it is claimed.

BG
Bill Gates's company is accused of sinking smaller software houses
Because only Microsoft knows what updates are planned for the operating system, it has a head-start when tailoring new programs for Windows. The company effectively has privileged access to future technology changes.

Microsoft has also incorporated programs into its operating system - a practice known as "bundling" - that previously had to be bought separately. The most commonly cited example is its Internet Explorer web browser which it bundled into (included in) Windows 95.

The effect was devastating on Explorer's main rival, Netscape Navigator, which saw its share of the browser market fall from about 90% to 60% in two years from early 1996. In the same period, Explorer went from almost nowhere to a near 40% share.

Strong-arm tactics

Netscape is fighting back hard - especially after being taken over by America Online - but other specialist software companies have gone to the wall as Windows began incorporating packages such as data compression and anti-virus programs.

Critics who claim Microsoft is out of control also point to new allegations of strong-arm tactics used on PC manufacturers. In October of 1997, the Department of Justice said there was evidence Microsoft had forced PC makers to include Internet Explorer before machines left the factory. This practice violated a 1995 court order.

Another complaint was that Microsoft has grown so big, it crushes competition unintentionally. It is said the company stifles innovation because investors are reluctant to back a potential Microsoft rival.

Breaking new ground

Industry analysts were also concerned about the effect of Microsoft's broadening horizons. It is making major in-roads into the realms of network computing where its specialist Windows NT package accounted for 40% of operating systems by the time the legal action got underway in late 1997.

It has also been expanding into new territory on the internet, with services such as CarPoint, which allows users to research and buy a car over the Web, and Investor, a personal finance site. Its Expedia Website, which enables users to book airline tickets, also has travel agents worried.

Critics take comfort from the fact that not all that Microsoft touches turns to gold. Its ambition to take on America Online with the Microsoft Network largely flopped, while personal finance software company Intuit remained top in its sector into 1998, despite Microsoft's failed attempt to buy a stake in the firm.

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