Microsoft Corp Chairman Bill Gates responded to the state and federal lawsuits yesterday by claiming that the action was a step backward for America, consumers, and for the PC. Gates said he was disappointed that, after 10 days of intensive negotiations during which Microsoft put forward substantive, serious proposals, despite the fact that we felt the governments claims were without merit an agreement hadn’t been reached. They wanted us to hide all of Windows, and insisted on us installing Netscape on every machine he said. Gates said he was disturbed during negotiations to hear that the words used were always ‘Netscape this’ and ‘Netscape that’ and that his personal name was constantly used. It’s not a personal issue he insisted. Meanwhile, William H Neukom, Microsoft senior vice president for law and corporate affairs, styled the government’s action as really just a repeat of the lawsuit it filed last October. Like last year’s case, the government’s central complaint is that it’s somehow illegal for Microsoft to advance our technology and help consumers by making Windows work well with the internet. That case is currently under appeal, and we are expecting a decision at any time. Only last week, the three judge Appeals Court grated Microsoft’s motion for a stay of the preliminary injunction issued by a Federal Court judge last December applying to Windows 98, saying that the original interpretation had put judges and juries in the unwelcome position of designing computers. During a press briefing in Redmond yesterday, Microsoft demonstrated how five computer companies had customized the initial boot screens of their systems to offer customers choice, including in some cases, the NetScape browsers. It pointed out that up to 80% of screen real estate was available to OEMs and distributors for such modifications. Gates said that he did not expect the retail release of Windows 98 on June 25 to be affected by the decision. Nevertheless, shares closed down 4% at $86.06.
