AOL/Netscape sues MS

Revenge for the browser wars

Judge Jackson opened the wave for a flood of civil antitrust lawsuits long before he found Microsoft guilty. The decision was his Findings of Fact, that declared Microsoft a monopoly: subsequent verdicts have really provided some mood music, with the District appellate court upholding most of the Findings.

However the first, and surely the biggest civil suit was launched yesterday by AOL-Time Warner, through its Netscape subsidiary, in the DC District Court. AOL-TW, valued at $36 billion of backing, has plenty of resources to fight a prolonged case.

AOL-TW is about to spend a lot of money in hopes of finally redeeming its Netscape purchase. The company's browser division has filed an antitrust suit against Microsoft, charging illegal tactics in the war which reduced Netscape from the world's number one browser to a novelty in a few short years.

AOL/Netscape is seeking unspecified monetary damages in addition to sanctions against the Redmond behemoth which go considerably farther than the Justice Department's illusory settlement.

The suit seeks to "eliminate the continuing effects of Microsoft's illegal conduct and to restore competition lost in the operating system market and in the Web browser market because of Microsoft's illegal conduct."

Of course it's unthinkable that any court-ordered remedy could restore Netscape to contender status this late in the game, so whatever fix AOL has in mind will have to reflect current or emerging market conditions.

And what of AOL-TW's move to restore competition in the operating systems market? AOL-TW isn't in the OS business, never has been, and won't be in the future: it's now gone on the record to give a comprehensive denial that there was anything in the Washington Post story which claimed AOL was in discussions to acquire Linux distro Red Hat.

No doubt a number of other companies bruised by Microsoft's guerrilla marketing practices like Apple and Sun will be watching this one closely, looking for legal angles they themselves might harvest in future.

If AOL-TW prevails, then we can expect others to be encouraged. If AOL-TW loses, then they'll have spent a great deal of money not redeeming their Netscape purchase. But we reckon they can afford it in any case.

The Beast will need to be a little more fastidious in its legal defence than it was in its rapid rebuttal today.

"AOL purchased Netscape for $10 billion," Microsoft said in its statement, "and basically squandered that asset. And now they want to blame Microsoft for their own mismanagement."

Actually, it the figure was $4.2 billion, and it was a stock swap. ®

Andrew Orlowski contributed to this article