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AT THE GATES OF HELL
Microsoft’s Latest Foibles Have Congress, Techies Freaking
To hear Senator Charles Schumer (D., N.Y.), put it, Microsoft’s latest software gambit is tantamount to the fruit of Satan’s loins. In his view, according to a report in the Wall Street Journal, the release of the company’s new Windows XP operating system threatens to cause "grave harm to consumers" and competing companies including AOL Time Warner, Eastman Kodak and RealNetworks. Such a view is surprising, given that Schumer has been a Microsoft cheerleader until now.

But concern over what the Redmond, WA technology giant has up its sleeve this time has prompted the Senate Judiciary Committee to schedule a new round of Microsoft hearings, to be chaired by Senator Patrick Leahy (D-VT). At issue will be whether the new OS thwarts competition by forcing systems running it to use Microsoft’s media player, instant messaging and digital photo software.

"I have observed Microsoft engaging in what appear to be anticompetitive practices, and my views on the company are swiftly changing," Schumer told Microsoft CEO Steve Ballmer in a letter, according to published reports.

Microsoft is still awaiting resolution of its Federal antitrust case, and is loath to undergo senate hearings while the case is still pending, but the committee seems intent on proceeding. Microsoft last came under congressional scrutiny—and the razor-like tongue of Senator/songwriter Orrin Hatch (R-UT) three years ago.

If the current government interest in Microsoft’s Dr.Evil-like ways sounds like just another episode in the long, strange sitcoms that is life in the era of Bill Gates, world’s richest man, insiders say that’s simply because it is. Indeed, the conventional wisdom seems to be that "Microsoft will be Microsoft," and billions upon billions of dollars in the bank do give a company certain advantages. Yes, it is obvious.

The Microsoft intrigue doesn’t stop there, however. The just-announced $100 million investment America Online made in unprofitable 800-pound e-commerce gorilla Amazon.com has been cast by many, including CNet, as the latest salvo in the great AOL vs. Microsoft war—a war being waged for control of the e-commerce and targeted-marketing arenas. The theory is that AOL wants in on Amazon’s e-commerce and so-called "e-wallet" technology (software that facilitates and authenticates online credit card transactions) to better compete with Microsoft’s Passport e-wallet solution, and some other Microsoft initiative code-named "Hailstorm," which sounds like nothing but trouble to us. Especially as we’ve forgotten where we left our umbrella.

Reports that AOL has the unusual option to make a confidential play to buy Amazon only makes it clearer that AOL is serious about taking Microsoft to task. And if a possible AOL-Amazon combination in the wake of Microsoft’s fearsome dominance of the desktop computer doesn’t bring on the Big Brother chills, all the major media mergers of the past few years have truly numbed you beyond recognition.

The coda to all of this is digital rights management (DRM) company InterTrust and its patent-infringement suit against Microsoft, whose Windows Media DRM, InterTrust claims, steals from its own innovations. Aside from the fact that two companies are in court over an infringement suit concerning technology designed to prevent infringement (which is no small irony), the InterTrust suit, amended Tuesday to include additional claims, is just one more instance of either Microsoft going after and taking whatever it wants because it’s Microsoft, dammit, or jealous-ass bush-league players gunning for the big guy.

Some have asserted that InterTrust is in trouble, like so many dot-com or dot-com related companies, because it doesn’t have a viable business yet, and thus its suit against Microsoft is just a last-gasp attempt to keep itself afloat. But regardless of the merit of InterTrust’s action, this much is clear: Microsoft is going to have to defend every inch of its rather sizeable turf—and its legal department won’t be resting for a long, long time.

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