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Utah firm that is suing Microsoft welcomes scrutiny of software giant

A Utah company that is suing Microsoft for unfair business practices says renewed scrutiny by the U.S. Department of Justice backs its claims that the software behemoth doesn't play fair.

Caldera Inc., based in Provo, will take on Microsoft next fall in U.S. Federal Court in Salt Lake City, where it will argue that the company has purposefully thwarted competition for operating system software used in personal computers. Caldera owns a product called DR DOS that is an alternative to Microsoft's DOS program.Every computer that runs Windows 3.1 or Windows 95 uses DOS. The Windows applications are a graphical layer on top of DOS, which makes a brief appearance on computer monitors as a machine starts up and then disappears into the background as Windows takes over.

Caldera filed its antitrust suit last summer seeking unspecified damages for income it might have realized had its technology not been locked out of the market when Microsoft began licensing MS DOS on IBM personal computers back in the '80s.

It alleges Microsoft blocked competition with unfair pricing strategies, unfounded claims about future products and false error messages that made it appear DR DOS would not work with Windows.

Attorneys for Caldera are scheduled to get statements from Micro-soft Chairman Bill Gates next week in preparation for the jury trial set for November 1998.

A Microsoft spokesman said at the time the suit was filed that it merely rehashed "tired old allegations" that are without merit. The spokesman also said the suit involved "outdated technology" that the market has forsaken.

But Caldera officials say DOS remains key to personal computer operating systems and that its product is a viable platform for a new set of Internet-related products, including a Web browser.

Its suit is aimed at making Microsoft pay for past anti-competitive practices and setting a landmark precedent that will level the field for the rest of the industry, said Ransom Love, vice president for strategic and business development.

"We allege those practices do not provide for or enable small companies to compete effectively and fairly based on technology or merit," Love said.

Love said that Caldera, unlike many other companies, is able to take on Microsoft because its products work independently from Micro-soft technology. "We're a viable alternative if we can have an open and fair marketplace to compete in," he said.

It's not just small technology companies that are crying foul over Microsoft's control of the personal computer market, however.

Netscape Communications Corp. and Sun Microsystems have both protested Microsoft's business practices.

Sun filed a lawsuit against Microsoft days after it released the latest version of its Internet Explorer browser, alleging Microsoft hobbled its Java programming language in the new browser.

And Netscape last summer urged the U.S. Justice Department to investigate what it claimed were Microsoft's efforts to make its browser the sole choice for surfing the Internet. Netscape claims Microsoft gives PC makers discounts on Windows 95 software if they don't pre-install competing browsers on the machines.

Those claims gained credence Monday when the Justice Department asked a federal court to fine Microsoft $1 million a day for violating a 1995 court order that bars it from setting up licensing deals with PC makers that block competition.

The petition says Microsoft is requiring PC manufacturers to license and distribute its Internet browser as a condition of licensing Windows 95, which is pre-installed on 80 percent of computers. Caldera alleges in its suit Microsoft used a similar tactic to get PC makers to use its DOS program.

Joel I. Klein, assistant attorney general for the department's antitrust division, said Microsoft is using an "unlawful advantage to beat back an important competitive challenge to its Windows monopoly."

Love said the Justice Department's petition is an endorsement of Caldera's claims, and that while the technologies at issue are different, the concept behind the two actions are the same.

"The government recognizes Microsoft is a monopoly in the industry and that it is using that influence to impair competition," he said.

The Justice Department claims Microsoft is stifling "unfettered competition" that might lead eventually to browsers that replace Windows altogether.

"Each of Microsoft's products should compete on its own merits," Klein said.

Microsoft has 11 days to respond to the Justice Department's petition.