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AOL’s Netscape Files Antitrust Suit Against Microsoft for 1990s Violations

By P.J. Huffstutter
LOS ANGELES TIMES -- An AOL Time Warner Inc. unit filed a civil antitrust suit Tuesday against Microsoft Corp. claiming the Redmond, Wash.-based giant’s monopolistic behavior nearly pushed AOL’s Netscape Internet browser out of the market.

The lawsuit filed by AOL subsidiary Netscape Communications Corp. in U.S. District Court for the District of Columbia draws heavily from federal court findings that Microsoft’s business practices amid the infamous browser wars of the 1990s violated federal antitrust laws.

A federal judge ruled in April 2000 that Microsoft used anti-competitive means to thwart browser Netscape and a panel of seven appellate judges upheld eight separate antitrust violations by Microsoft a year later.

“We have a fiduciary responsibility to our shareholders, and a responsibility to consumers, to pursue this case,” said AOL executive John Buckley. “There are still issues that obviously have yet to be resolved. We believe it’s better to file this action now.”

Microsoft officials said the complaint is merely a sign that AOL is trying to compete with Microsoft in the courts rather than the marketplace.

“They’ve timed today’s filing to interfere with the ongoing efforts to bring our (other) antitrust case to a conclusion,” said Jim Desler, a spokesman for Microsoft.

“This lawsuit is not about consumers. It’s really about a company concerned about its business performance,” Desler said.

AOL, which bought Netscape for $4.2 billion in 1999, is seeking unspecified damages that legal experts say could top hundreds of millions and possibly billions of dollars. If AOL wins the case and can prove actual financial damages in court, the company would be entitled to triple that amount, according to federal antitrust laws.

Netscape Navigator, once the dominant Internet browser, has been all but crushed by Microsoft’s Internet Explorer. Some 66 million U.S. home PC users relied on Explorer, compared with 16 million for Navigator, according to the latest figures from Internet analyst Jupiter Media Metrix. At work, Explorer users outnumbered Navigator users 29 million to 10 million.

In the complaint, Netscape asked for a jury trial and an immediate injunction against Microsoft’s predatory behavior. Netscape claimed that “it lost browser licensing revenues; it lost browser market share and it lost the profits that would have existed if Microsoft had not acted illegally.”

Ultimately, a judge will decide the amount of any damages and conduct remedies. Netscape’s complaint suggested the conduct remedies could be derived from a proposal filed last year by nine states and the District of Columbia.