Netscape files suit against Microsoft

D. Ian Hopper

Wednesday, Jan. 23, 2002 | 9:41 a.m.

WASHINGTON -- Netscape, now owned by AOL Time Warner, has revived a feud from the 1990s, suing Microsoft for using anticompetitive business practices to ensure the dominance of the Explorer Internet browser over Netscape's pioneering Navigator.

In papers filed in federal court Tuesday, AOL argued Microsoft made deals with computer manufacturers and Internet providers to shut Netscape out of the marketplace and destroy what could have been an alternative to Microsoft's desktop dominance.

AOL's suit is fueled by the government's antitrust suit against Microsoft. A federal appeals court sided with the government last year, saying Microsoft used anticompetitive practices to crush Netscape. The Bush administration and nine states settled their case in November; AOL says it's backing nine other states that refused to sign on to the settlement.

"The aims of Netscape's lawsuit are entirely consistent with their efforts," AOL General Counsel Randall J. Boe said. "There is no question that Microsoft's conduct violated the law and harmed competition and consumers."

Microsoft spokesman Vivek Varma said AOL is trying to compete with Microsoft in the courts rather than the marketplace.

"We don't think this lawsuit has anything to do with consumers," Varma said. "AOL has been using the political and legal system to compete against Microsoft for several years. This is just the next legal tactic in their business plans."

AOL wants monetary damages -- which under federal law would be triple the actual damages found by the court -- as well as an immediate injunction against "ongoing and further damage" to Netscape. AOL, which has acted as an adviser to state prosecutors in the Microsoft antitrust case, bought Netscape in 1999.

One possible option, if a judge ruled in favor of AOL, would be to force Microsoft to sell a stripped-down version of its Windows operating system so computer manufacturers could choose which Internet browser to offer. That has also been requested by the nine state attorneys general still suing Microsoft.

An Internet browser is a program that allows a computer to access the World Wide Web. Netscape's founders pioneered browser software, but many computers now use Microsoft's Explorer browser.

Neither the Justice Department nor the states still suing Microsoft opted to comment on the AOL suit.

U.S. District Judge Thomas Penfield Jackson, who heard the federal government's case against Microsoft in the Netscape matter, found that Microsoft tried to keep consumers from being able to choose Netscape's Navigator browser. The appeals court affirmed many of Jackson's decisions.

Microsoft's business practices "help keep usage of Navigator below the critical level necessary for Navigator or any other rival to pose a real threat to Microsoft's monopoly," the appeals court wrote last year.

University of Baltimore law professor Bob Lande said of AOL and its lawsuit, "This is a company that obviously can afford it, and wouldn't take the step lightly.

"I think they've got an excellent chance of success given that the government has established the facts and established that Microsoft has broken the law," he said.

A judge would still have the challenge of choosing a remedy that would restore competition to the Internet browser market. Netscape has less than 20 percent of the Internet browser market, compared to more than 70 percent in 1995.

"You can't literally put the market back in the competitive position it was in, so you'd have to think of a forward-looking remedy to help restore competition in the market as best as possible," Lande said.