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Microsoft dominates cyberspace debate

Fears that Microsoft Corp.'s diverse investments in Internet businesses could dominate the emerging industry underscored a Senate Judiciary hearing Tuesday on competition in cyberspace.

"I have not made any secret of the fact that I have serious concerns about Microsoft's recent efforts to exercise its monopoly power, and that I plan to continue to examine the company's practices," said Senate Judiciary Chairman Orrin Hatch, R-Utah.

Although the loosely focused hearing wasn't technically about Microsoft, Hatch's comments set the tone for a broader debate about the company's market power. Microsoft's Windows operating software runs 80 percent of personal computers.

Hatch's state is home to Novell Inc., a Provo company that employs nearly 6,000 people and is a major competitor of Microsoft.

Microsoft offered to testify at the hearing but wasn't allowed to appear, company spokesman Mark Murray said.

In a lawsuit filed last month, the Justice Department charged Microsoft violated a 1995 consent decree barring the company from anti-competitive practices. The suit, which seeks fines of $1-million a day, accused Microsoft of threatening PC makers with terminating their license for Windows if they altered Microsoft's Internet Explorer software.

Microsoft has long been accused of trying to leverage its dominance in the operating systems software to expand into new markets, such as online services. The company denies it was hurting competition and says it was merely enforcing Windows licensing agreements.

Charles Rule, former Justice Department antitrust chief in the Reagan administration, told the congressional hearing that he had doubts about the government's case against Microsoft.

"Basically there is no allegation that Microsoft, in effect, has disabled any competitor," said Rule, whose firm, Covington & Burling, represents Microsoft in some non-antitrust matters.

He said current antitrust laws are adequate to protect small businesses in the digital age and warned about government interference in the fast-growing technology market.

Other antitrust experts were more critical. One pointed to Microsoft's plan to become a gateway to other sites as a way to garner advertising revenues. For example, Microsoft's Internet browser software has a channel bar that points users to numerous sites owned by Microsoft.

Microsoft's Murray denied that the browser directs people first to sites owned by Microsoft.

"It points to a variety of non-Microsoft sites as well," he said. He added that Netscape Communications Corp., maker of the leading Internet browser, has a similar but less flexible channel bar.

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