Originally created 05/15/98

Microsoft's concessions consistent with past behaviors

NEW YORK -- Microsoft's latest move to appease the Justice Department fits a pattern of behavior the software company has used in the past with good results.

Since the early 1990s, when the Federal Trade Commission and the Justice Department began scrutinizing its business practices, Microsoft has often held out until the last minute before offering concessions.

Regardless of the action, "Microsoft has always been willing -- when they're caught -- to say, `We'll stop,"' said Silicon Valley litigator Gary Reback, an ardent foe of the software giant.

In the latest case, Microsoft agreed Thursday to delay shipment of the next version of its operating system, Windows 98, to computer manufacturers until Monday while talks with the Justice Department continue. The software had been scheduled to be delivered Friday.

Since October, when the government filed suit over alleged violations of a 1995 consent decree, the company has made several other strategic retreats in an attempt to head off controversy.

-- In January, Microsoft agreed to ship a version of Windows 95 without the icon for its Web broswer, Internet Explorer.

-- In March, on the eve of chairman Bill Gates' testimony before the Senate Judiciary Committee, Microsoft relaxed a set of exclusive agreements with Internet service providers.

-- And in April, in response to mounting criticism, Microsoft dropped contract provisions that would have restricted the ability of companies producing Web pages for Microsoft from doing business with its competitors.

"In each instance Microsoft was very careful to say they had not done anything wrong, that they were making these changes for business reasons," said Richard Gray, an antitrust specialist with a San Jose, Calif., law firm. "But taken as a group, you can see they were done to head off any antitrust action by the government."

Howard Morse, a former senior official to the FTC Bureau of Competition and partner at a Washington law firm, said Thursday's talks and delay in Windows 98 are typical of Microsoft.

"They obviously are aggressive in their litigation posture," he said. "But when faced with the likelihood of a loss in the past, they have been ready to negotiate."


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