AOL Time Warner files suit seeking damages from Microsoft

Tuesday, January 22, 2002

AP Technology WriterWASHINGTON (AP) -- AOL Time Warner sued Microsoft in federal court Tuesday over AOL's Netscape Internet browser, which ruled computer desktops until Microsoft began giving its competing browser away.

Many of Microsoft's business practices, including ones in which the company encouraged computer manufacturers and Internet providers to distribute its Web browser instead of Netscape, were found to be anticompetitive by a federal appeals court last year. AOL, which now owns Netscape, wants Microsoft to cease its contested business practices and pay damages.

AOL executive John Buckley noted the court ruling and said, "This action is an attempt to get justice in this matter."

AOL filed the lawsuit in the U.S. District Court for the District of Columbia. Under federal law, AOL would be entitled to triple any actual damages found by the court.

The company also asked for an immediate injunction against "ongoing and further damage" involving Netscape's browser, Buckley said.

One possible option, if a judge rules 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 nine state attorneys general suing Microsoft in federal court.

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.

"All of Microsoft's agreements, including the non-exclusive ones, severely restricted Netscape's access," Jackson wrote.

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 only a sliver of the Internet browser market, compared to its dominance several years ago.

"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.

The federal government and nine other states settled their landmark antitrust suit with Microsoft last year, and that settlement is under consideration by a federal judge. AOL has been a longtime critic of Microsoft and has talked frequently with prosecutors throughout the case.

------On the Net:

AOL Time Warner: http://www.aol.com

Microsoft: http://www.microsoft.com

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