When the elephants fight, it’s the grass that gets crushed. And technology leaders at the grass roots in education have reason to worry that this old African proverb just might apply to the legal battle now joined between technology pachyderms Microsoft and AOL Time Warner.

Media conglomerate AOL Time Warner Inc. has filed a lawsuit against the software giant seeking damages for harm done to AOL’s Netscape internet browser. The now flagging Netscape browser had ruled computer desktops until Microsoft began giving its competing browser away.

Analysts and legal experts agree this newest chapter in the ongoing antitrust saga against Microsoft is sure to prolong the court proceedings even further. Some fear the costly struggle will drain needed resources from technology research and development at both companies. And others say the fight is for ultimate control of the internet.

What is clear is that Microsoft now faces three distinct legal fronts in defending its business practices. U.S. District Judge Colleen Kollar-Kotelly is considering a settlement to the original antitrust case that has the support of the federal government and nine state attorneys general, while nine other states are still suing Microsoft.

Many of Microsoft’s business practices, including ones in which the company encouraged computer manufacturers and internet providers to distribute its Internet Explorer web browser instead of Netscape, were found to be anticompetitive by a federal appeals court last year.

AOL, which bought Netscape in 1999, wants Microsoft to cease its contested business practices and pay damages. AOL Time Warner executive John Buckley noted that court ruling and said, “This action is an attempt to get justice in this matter.”

A Microsoft spokeswoman said the software giant is “disappointed” that AOL Time Warner has chosen litigation.

“We’ve consistently tried to work more closely with [AOL executives] in a variety of areas, including instant messaging,” the Microsoft representative said. “They have consistently turned us down.”

AOL Time Warner filed its lawsuit in the U.S. District Court for the District of Columbia Jan. 22. Under federal law, AOL would be entitled to triple any actual damages found by the court.

The company also asked for an immediate injunction against “ongoing and further damage” involving the Netscape Navigator browser, Buckley said.

But Microsoft officials questioned AOL’s motives in filing the suit. “This lawsuit is not about consumers, this is about a company concerned about its business performance and attempting to use the courts rather than innovating in the marketplace,” said the Microsoft spokeswoman, who wished to remain anonymous.

One possible option, if a judge ruled in favor of AOL, would be to force Microsoft to sell a stripped-down version of its Windows operating system so computer manufacturers could choose which internet browser to offer. That has also been requested by the nine state attorneys general suing Microsoft in federal court.

The federal government and the nine other states settled their landmark antitrust suit with Microsoft last year, but that settlement is still under consideration by Kollar-Kotelly. AOL has been a longtime critic of Microsoft and has talked frequently with prosecutors throughout the case.

U.S. District Judge Thomas Penfield Jackson, who heard the federal government’s case against Microsoft in the Netscape matter, found that Microsoft tried to keep consumers from being able to choose Netscape. The appeals court affirmed many of Jackson’s decisions.

Microsoft’s business practices “help keep usage of Navigator below the critical level necessary for Navigator or any other rival to pose a real threat to Microsoft’s monopoly,” the appeals court wrote last year.

Perhaps, but that isn’t the reason for AOL’s current lawsuit, Microsoft alleges.

“After hearing all the evidence in the antitrust trial, AOL purchased Netscape for $10 billion,” said the Microsoft spokeswoman. “Now, AOL wants to blame Microsoft for Netscape’s and AOL’s own mismanagement.”

At least a few analysts agree. AOL was more interested in Netscape’s media property, the Netscape.com web site that many users kept as their home pages, said Ken Allard, senior vice president of research at Jupiter Media Metrix.

Other Netscape initiatives, such as browser development, enterprise software, and services did not receive as much attention, Allard said. AOL also never integrated the Netscape browser into its proprietary online service, instead relying on a version of Microsoft’s Internet Explorer.

In a viewpoint posted on the ZDNet web site Jan. 25, market research firm Gartner Inc. said the real battle between AOL and Microsoft is over control of content.

“Both the online content provider and the software developer are determined to be the trusted party that internet users rely on to store all kinds of information—such as addresses, bookmarks, passwords, and credit card numbers,” said Gartner.

This control is particularly key to AOL Time Warner and Microsoft, Gartner said, because “if either company can become the default holder of presence information, it will have access to significant and recurring revenue.”

University of Baltimore law professor Bob Lande said of AOL and its lawsuit: “This is a company that obviously can afford it, and wouldn’t take the step lightly. I think they’ve got an excellent chance of success, given that the government has established the facts and established that Microsoft has broken the law.”

But proving Microsoft’s guilt could be a long time in coming, industry experts say.

“Given the stakes, and the spin machines that both companies have at their command,” said the Gartner viewpoint, “the fireworks around the AOL Time Warner suit hold the potential to eclipse those of the government trial.”

A judge would still have the challenge of choosing a remedy that would restore competition to the internet browser market. Netscape now has less than 20 percent of the internet browser market, compared to more than 70 percent in 1995.

“You can’t literally put the market back in the competitive position it was in, so you’d have to think of a forward-looking remedy to help restore competition in the market as best as possible,” Lande told ZDNet.

For educators, who increasingly rely on web-based content in classrooms and central offices, anything with the potential to significantly alter the accessibility and richness of the internet is a development worth watching.


AOL Time Warner

Microsoft Corp.

Gartner Inc.