Microsoft came out fighting against judicial claims that it is a monopoly and abused its dominance of the personal computer industry last night in its first official response to the preliminary ruling of the landmark legal battle.
The world's largest software company said the preliminary findings of Judge Thomas Penfield Jackson did not prove it had broken any law. The judge dealt Microsoft a severe blow in his first ruling two months ago, accusing it of harming consumers and stifling competition by bullying competitors and partners.
Jim Cullinan, a Microsoft spokesman, said last night that this judgment did not necessarily warrant legal remedy. "Just because it was not the best picture painted of the company, that doesn't add up to a violation of the law," he said.
The strength of Microsoft's denial confirms its uncompromising stance on the issue less than a week after Bill Gates, its founder, stepped back from the day-to-day running of the company. Mr Gates, the world's wealthiest man, was seen as instrumental in the group's almost intransigent approach to accusations brought by the US justice department and 19 US states.
Unable to deny the findings of fact decreed by the judge in November, Microsoft's chief argument rests with its belief that the government has failed to prove that it broke the law. In the filing lodged last night, Microsoft stated: "Even accepting the court's findings of fact, plaintiffs still have not satisfied their burden under the governing law on any of their claims."
The Seattle-based group denied that its behaviour had prevented Netscape, a key competitor, from entering the market for internet browsers. It also claimed that the government's case ignored "many of the most serious competitive threats faced by Microsoft's operating systems". Finally, the company argued that controlling more than 90% of the world's operating systems through its Windows service was not illegal. "Having an extremely popular product doesn't make a company a monopoly," it said.
Legal experts were unsurprised at the group's tactics last night and said Microsoft could do little else in spite of the settlement talks currently being carried out.
Ed Black, president of the Computer and Communications Industry Association which has campaigned against Microsoft, said: "I expected nothing less than a full court press to try to argue their case. They are going to pick on any point they can quibble with."
The independent mediator presiding over the talks has indicated that he wants to see some evidence of common ground by the end of this month.
But the talks could drag on until the next time Microsoft and the government are due to appear before Judge Jackson towards the end of February.
Although Microsoft reported better than expected earnings and record revenues, traders took fright at a relatively pes simistic forecast for the future. Earnings jumped 22% to 44 cents a share in the last three months of the year, above market expectations of 42 cents in spite of an exceptional charge to settle a far smaller anti-trust case.
Group revenues of $6.1bn benefited from strong demand for personal computers over the Christmas period.
