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  Microsoft Foes Complain to Senate Panel

By Rajiv Chandrasekaran
Washington Post Staff Writer
Friday, July 24, 1998; Page F03

Five computer industry executives complained to the Senate Judiciary Committee yesterday that Microsoft Corp. is using unfair business practices to squelch competition in areas other than ones targeted in a recent Justice Department antitrust suit against it.

One of the executives charged that Microsoft is distributing technology that "breaks" his company's rival product, an allegation that Microsoft denied.

The three-hour hearing – which featured Oracle Corp. chief executive Lawrence Ellison and Jeffrey Papows, head of International Business Machines Corp.'s Lotus Development unit – featured frequent testy exchanges between the pro- and anti-Microsoft camps.

Among the more sensational charges was that made by Robert Glaser, chief executive of a company called Real Networks Inc. He accused Microsoft of distributing a piece of software that deliberately disables his company's competing software.

Real Networks makes software that allows users to receive real-time audio and video clips over the Internet. Microsoft recently released software called the Windows Media Player that allows users to perform a similar function.

Providing a demonstration for the committee, Glaser said that installing the Windows Media Player on a computer will prevent the newest version of his RealPlayer software from working properly and give the user an error message.

"Instead of . . . peacefully coexisting with us, Microsoft has instead in effect tried to stop our products from being used," Glaser told the committee. "What Microsoft is doing is wrong, pure and simple. It damages our business and reputation."

But a Microsoft executive said the error messages are the result of a programming "bug" in Real Networks' new software. "They're not installing their software [on the user's machine] correctly," said Yusuf Mehdi, the director of marketing for Windows.

"It was a very misleading demonstration," Microsoft spokesman Mark Murray said.

In an interview later yesterday, Glaser said the Windows Media Player also affects older versions of RealPlayer, a claim Mehdi called "disingenuous."

The hearing also focused on Microsoft's efforts to popularize a version of Windows for corporate networks. The executives charged that Microsoft copies software made by other companies and adds them to the corporate operating system, called Windows NT. "It's the standard strategy: Copy it and add it to Windows," Ellison said.

Microsoft and the legislators that represent the company's home state of Washington yesterday accused Committee Chairman Orrin G. Hatch (R-Utah), whose state is home to Microsoft competitor Novell Corp., of conducting a biased inquiry. Microsoft officials maintained that their practice of adding new features to Windows is legal and benefits consumers.

Hatch defended his investigation, saying that "preserving competition and innovation in the software industry is one of the more important economic policy issues of our time."

The Justice Department and 20 states filed an antitrust suit against Microsoft in May seeking to force the company either to remove its Internet browsing technology from its Windows 98 operating system software or include a browser made by rival Netscape Communications Corp.

Microsoft denies the allegations; a trial is scheduled for Sept. 8.

The department is continuing its investigation into other Microsoft business practices, including the tactics it uses to market Windows NT and its efforts to develop multimedia software. Two companies that have worked with Microsoft on multimedia software, Apple Computer Inc. and Real Networks, said yesterday they have been subpoenaed by the Justice Department.

The department is examining whether Microsoft tried to convince Apple to stay out of the market for consumer multimedia software in exchange for Microsoft endorsing certain Apple products, according to sources familiar with the matter.

A senior Microsoft lawyer, Brad Smith, said yesterday that the company had not yet received any queries from government lawyers about its relationship with Apple. A company spokesman called the allegation false and said it "reflects a lack of understanding of the software industry."

© Copyright 1998 The Washington Post Company

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