Gates Criticizes Justice Dept.

In his most extensive defense of his company to date, Microsoft Chairman Bill Gates attacked an antitrust case by the Justice Department and 20 states as "the government's lawsuit on behalf of Netscape."

"We are defending the legal right of every company to decide which features go into its own products," Gates wrote in a three-page essay in Saturday's editions of The Economist magazine. "... America's antitrust laws do not provide any basis for government regulators to attempt to design software products."

The federal government and 20 states filed broad antitrust lawsuits May 18 alleging that Microsoft, whose Windows software is used on 80 percent of the world's desktop computers, illegally used its market influence to crimp competition.

The government said Microsoft forced computer makers who sell Windows also to sell the company's Internet browser, which amounts to illegal "tying" under antitrust law. Microsoft contends it "integrated" the browser into its operating system, which is legal.

"The central flaw in this allegation is that there are absolutely no laws against innovating, Gates said. "In fact, the law says that every company - from the smallest startups to the largest multinational - should always work to improve its products."

The government wants Microsoft to remove its browser from the latest version of Windows, which goes on sale June 25, or include a copy of its chief competitor's browser.

The Justice Department said Thursday its case "shows that Microsoft violated the antitrust laws by using a wide variety of anti-competitive practices.

"We filed suit to protect the right of consumers and computer manufacturers to choose the software they want, rather than have those choices dictated by Microsoft," Justice spokeswoman Gina Talamona said.

Among the most sensational of the government's claims is that Microsoft met secretly with rival Netscape Communications in 1995 to divide up the market for browser software, an attempt at illegal collusion.

Gates, who at 43 is among America's richest men, previously called that charge "an outrageous lie." In his essay, he said the meeting "was to discuss various technologies Microsoft proposed sharing with Netscape, so that Netscape's browser could take advantage of the cool new features we were developing for Windows 95."

Gates also said that, afterward, Netscape executive Marc Andreessen wrote in an e-mail to a Microsoft employee: "Good to see you again today - we should talk more often." Gates called that "an odd sentiment given his (Andreessen's) supposed indignation over the meeting."

Much of the government's case is buoyed by personal e-mail messages from Microsoft executives, such as when Microsoft Senior Vice President James Allchin described "leveraging Windows from a marketing perspective" to defeat Netscape.

"When you consider that Micosoft ... provided over a million pages of internal documents and e-mails, it is not surprising that the government has been able to find a handful of statements -- many by relatively junior staffers -- that can be taken out of context," Gates said.

The case is set to go to trial September 8.