Microsoft Will Seek Summary Judgment Dismissing Antitrust Lawsuit

REDMOND, Wash., Aug. 6, 1998 — In an effort to accelerate the resolution of a pending government lawsuit, Microsoft Corp. said Thursday that the company plans to file a motion for summary judgment, urging Federal District Court Judge Thomas Penfield Jackson to dismiss all or some of the claims asserted earlier this year.

“We believe the Court can resolve this case now without the need for an expensive and time-consuming trial,”
said William H. Neukom, Senior Vice President for Law and Corporate Affairs at Microsoft. Neukom added,
“The facts established in discovery show that the government’s claims are without merit.”

The company indicated it would file its motion for summary judgment by Monday, Aug. 10. Microsoft will work with the government on a briefing schedule so that the matter can be resolved before the trial date.

“Microsoft has been working hard for several years to develop and release improved versions of Windows® that work well with the Internet,”
Neukom said.
“The recent Court of Appeals decision reaffirmed the important legal doctrine that building better products for customers promotes competition and is therefore strongly encouraged by the law.”

At a Thursday hearing, attorneys for Microsoft told Judge Jackson that the company believes that the entire case can be resolved without a trial on the basis of undisputed facts established through the discovery process, including evidence provided by Netscape Communications Corp. In its summary judgment motion, Microsoft will show that customers benefit from adding Internet-related improvements to operating systems such as Windows, and that these benefits are recognized by leading operating system vendors, all of whom have added Internet support to their products. Microsoft will also show that Netscape has had no difficulty distributing its Web browsing software to customers in vast quantities, notwithstanding government claims that contracts between Microsoft and various third parties have
“substantially foreclosed”
Netscape’s ability to do so.

The June 23 majority ruling by a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit stated that Microsoft has “clearly” demonstrated “benefits to its integrated design” of Windows 95 with Web browsing functionality. The Court recognized that “integration of functionality into the operating system can bring benefits” for customers. As the Court explained, “Antitrust scholars have long recognized the undesirability of having courts oversee product design, and any dampening of technological innovation would be at cross-purposes with antitrust law.”

“We believe there is a fundamental principle at stake in this case – we are trying to protect the ability of every company to improve its products for consumers. We believe consumers in the marketplace, not government regulators, should determine the features that go into a product,”
Neukom added.

“The facts show that Microsoft and Netscape are competing vigorously with one another. The result has been rapid development of innovative Web browsing software, widely distributed to consumers at little or no charge,”
Neukom said.

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