Microsoft's monopoly: the charge sheet

The Netscape versus Explorer battle is just one aspect of Microsoft's legal wrangles

Think of PCs and the mind quickly turns to Windows. It is the operating system used on 90% of desktop processors and, in the world of IT, has propelled Microsoft to superpower status.

But in the eyes of the US Justice Department, that is a big problem because Microsoft stands accused of capitalising on its hegemony.

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.

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 is bundled into Windows 95.

The effect has been devastating on Explorer's main rival, Netscape Navigator, which has seen its share of the browser market fall from around 90% to 60% since early 1996. In the same period, Explorer has gone from almost nowhere to a near 40% share.

Strong-arm tactics

Netscape is fighting back hard but other specialist software companies have gone to the wall as Windows began incorporating packages such as data compression and anti-virus programs.

PC manufacturers says they have been "leaned on" by Microsoft

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

Another complaint is that Microsoft is 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

Some analysts are 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 now accounts for 40% of operating systems.

Controversial services like Expedia have worried more traditional companies

It has also expanded 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 has largely failed, while personal finance software company Intuit is still top in its sector, despite Microsoft's failed attempt to buy a stake in the firm.