Licensing Flap Puts Reno on Microsoft's Case: $1 Million-a-Day Fine Sought

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Antitrust regulators sought a $1 million-a-day fine against Microsoft Corp. yesterday, accusing the software giant of illegally requiring computer makers to license its Internet browser software.

Microsoft violated a 1995 consent decree that barred the company from anti-competitive licensing practices, the Justice Department said in a lawsuit filed yesterday in U.S. District Court in Washington. The agency asked the court to stop Microsoft from extending its operating system monopoly to software that connects consumers to the Internet.

"Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly," Attorney General Janet Reno said.

The Justice Department's chief antitrust lawyer also hinted that Microsoft's problems may not be limited to the browser issue.

"We also want to make clear that we have an ongoing and wide-ranging investigation to determine whether Microsoft's actions are stifling innovation and consumer choice," said Joel Klein, assistant attorney general in charge of antitrust issues.

Microsoft did not violate the court order and will defend itself in court, said William Neukom, Microsoft's chief attorney. Microsoft's Internet Explorer browser is merely an extension of its Windows operating software, he said.

"All software vendors are entitled to improve their products and to do so rapidly," he said.

Redmond, Wash.-based Microsoft has come under antitrust scrutiny before because it controls more than 90 percent of the market for software that runs the basic operations of desktop computers. The Justice Department sued Microsoft in 1995 to stop it from buying Intuit Inc., which makes the popular Quicken personal-finance software, prompting Microsoft to abandon the deal.

The latest suit will be fought over whether Microsoft's Internet browser is a normal extension of its operating software or a new field of business. The issue is expected to be debated by lawyers over the next several weeks.

Specifically, the Justice Department wants Microsoft to:

* Stop requiring computer makers to install Microsoft's Internet Explorer when buying Windows 95.

* Require that consumers be notified they do not have to use Microsoft's Internet Explorer.

* Strike down non-disclosure provisions that deter companies doing business with Microsoft to provide information to the government.

Pressure has been mounting on antitrust officials to take action against Microsoft because critics say the company is expanding its operating-system monopoly to try to corner the browser market, too. …