Microsoft Corporation defended its position in the antitrust hoopla on Monday, hosting its own meeting with the press less than an hour after the DOJ and 20 states, plus the District of Columbia, announced that they were filing two separate lawsuits against the company. Chairman and CEO Bill Gates had few kind words for his adversaries.

"Windows is popular because it offers consumers the best combination of price and performance," Gates said. "How ironic that in the United States, where freedom and innovation are core values, these regulators are trying to punish an American company that has worked hard and successfully to deliver on these values."

Gates feels that the antitrust lawsuits will be a waste of taxpayer money.

"We believe an antitrust lawsuit is counterproductive, costly to the taxpayers and ultimately will be unsuccessful in the courts," he said. "The government's action today is a step backward for America, consumers and for the PC industry that is leading our nation's economy into the 21st Century. This suit is all about Microsoft's right to innovate on behalf of consumers: the right to integrate new technologies into Windows as they develop."

In a press release detailing its official response to the lawsuits, Microsoft said that the government has an "ongoing interest in forcing \[it\] to remove Internet functionality from Windows." It commented on several of the key claims made by the government:

  • The government is requesting a "free ride" for Netscape.
    According to Microsoft, federal and state lawyers asserted that making Windows work well with the Internet is somehow illegal. They also demanded that Microsoft include Netscape's competing Web browser in every copy of Windows. Netscape has said previously that it is developing its Web technology into a new computing platform that will render Windows obsolete. The government, Microsoft writes, was therefore demanding that Microsoft add a product to Windows that is intended to marginalize Windows. Microsoft said it does not believe the government's demand is reasonable or supported by the law. Microsoft officials compared bundling Netscape Navigator with Windows to forcing Coke to bundle two cans of Pepsi in every six-pack.
  • Choice for hardware manufacturers and consumers.
    Microsoft says that consumers who purchase a new PC and see the Windows desktop as the first screen are "assured of the product's quality, simplicity and reliability. Once that first boot-up takes place, they say, consumers can customize the desktop in any way they like, or with a few mouse-clicks, they can set up the PC to display another, competing software program." Microsoft says it "provides PC makers and consumers with choice and flexibility."
  • Agreements with Internet companies.
    The government alleged that Microsoft has entered into numerous exclusionary and illegal agreements with Internet companies such as America Online and other service providers. Microsoft says that it "has entered into various cross-promotional agreements in which \[it\] agrees to help promote and distribute a company's products and services in exchange for promoting Microsoft's technology. These agreement are legal and commonplace."
Microsoft also pointed to a recent Appeals Court ruling that said it would be able to bundle Internet Explorer with Windows 98. In its decision, the court wrote, "Any interpretation \[of the preliminary injunction\] which barred the distribution of Windows 98 under the conditions evidently contemplated by Microsoft would 'put judges and juries in the unwelcome position of designing computers'."

"I'm very disappointed we couldn't reach an agreement with the government," said Gates. "We spent 10 days in intense negotiations with the DOJ and the states. We put forth substantive, serious proposals, despite the fact that we felt the government's claims were without merit," Gates said.