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FTC Reported Deadlocked on Microsoft : Technology: Commissioners take no action on pursuing an antitrust complaint against the giant software company.

July 22, 1993|JONATHAN WEBER | TIMES STAFF WRITER

SAN FRANCISCO — A deeply divided Federal Trade Commission on Wednesday again failed to decide whether to pursue an antitrust complaint against software powerhouse Microsoft Corp.

An FTC spokesman said the commission took no action at a meeting on a "non-public law-enforcement matter" that is widely understood to be the Microsoft case.

Microsoft, for its part, issued a news release saying it was "gratified" that the FTC voted not to move ahead with an administrative complaint. But a Microsoft spokeswoman acknowledged that the company is not yet in the clear.

Sources close to the FTC stressed that the investigation is not closed. They said the commission remains in a 2-2 deadlock over whether to take action against Microsoft. The FTC initially deadlocked in February on whether to pursue a complaint, and the staff was sent back to gather more information.

For more than three years, the FTC has been investigating allegations that Microsoft has used its dominance of PC operating software to gain unfair advantages.

Competitors allege that Microsoft's licensing practices for its DOS operating system and insertion of certain error messages in its Windows products have prevented DOS rivals from gaining a foothold.

They also contend that Microsoft uses its control of DOS and Windows to gain unfair advantage in applications software such as spreadsheets and word processors, and that its tactics will effectively wipe out competition in the personal computer software business.

Microsoft denies engaging in any improper conduct.

It was unclear Wednesday how the FTC will proceed in light of the latest deadlock. One possibility would be to turn the case over to the Justice Department's antitrust division. That is the course favored by Microsoft rivals such as Novell Inc., but most antitrust experts consider it unlikely.

The Microsoft case is considered politically sensitive and a potential bellwether indicating where the Clinton Administration stands on antitrust issues.

While many in the Administration would like to reverse the laissez-faire attitude on antitrust that prevailed during the Reagan and Bush years, others are reluctant to move against a highly successful company that is a major exporter and a symbol of U.S. high-tech prowess.

Microsoft stock fell $1.50 to $79 in NASDAQ trading.

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