Sun Microsystems Inc filed an antitrust lawsuit against Microsoft Corp, accusing the world's biggest software maker of using its monopoly to hinder the adoption of Sun's rival Java programming language and other products.
The suit asks the court to force Microsoft to distribute Java software in its Windows XP operating system, said Sun General Counsel Michael Morris. Sun also seeks an order requiring Microsoft to disclose code for its Internet Explorer browser, to remove the browsing software from Windows, and monetary damages "north of US$1 billion," Morris said.
Sun CEO Scott McNealy, who for years has castigated Microsoft as a monopolist that harms innovation, is suing his nemesis as analysts have forecast Sun revenue to drop 30 percent in fiscal 2002. While Sun said it is suing to curtail acts that an appeals court found illegal, investors worried that the suit may distract Sun in its attempts to return to profitability.
"It's an admission that their software strategy is not gaining traction," said Christian Koch, an analyst at Trusco Capital Management, which manages about US$50 billion and holds Sun shares. "Now McNealy, instead of focusing on earning money for shareholders and competing with IBM, also has to focus on suing Microsoft to get Java on Windows XP."
Sun's suit adds to Microsoft's legal challenges. The Redmond, Washington-based company faces opposition by nine states to a proposed settlement of its four-year legal battle with the US government, private class-action lawsuits and an investigation by the EU.
AOL Time Warner Inc and Be Inc filed their own antitrust lawsuits against Microsoft recently. Investors predicted competitors would sue after an appeals court last year upheld a ruling that Microsoft is a monopolist that illegally abused its market power.
"Those findings are binding on Microsoft in this action and we will not have to reprove them," Sun's Morris said on a conference call. "I would be surprised if we can't clearly demonstrate damage that's north of a billion dollars."
Microsoft spokesman Jim Desler said that while lawyers have yet to study the lawsuit, the company believes it lacks merit.
"Java technology is widely used, and any lack of consumer acceptance of Java is due to Sun's own failures, and not actions of Microsoft," he said.
Java is intended to attack the popularity of Windows by allowing software developers to write programs that run on operating systems made by Microsoft, Apple Computer Inc and others without costly modifications. While Sun doesn't sell Java, the company promotes the language as a way to get more programmers to write software that is compatible with its computers.
Palo Alto, California-based Sun claims that Microsoft tried to distribute incompatible versions of Java in Windows, which runs 95 percent of the world's PCs, and through partnerships. Those actions harmed Sun's ability to sell servers, Sun alleges.
Sun shares rose US$1.17, or 13 percent, to US$10 on Friday. It reiterated a forecast that third-quarter revenue would top US$3.11 billion. Microsoft shares gained US$1.23, or 2 percent, to US$63.95.
Sun's 71-page complaint details 12 separate claims, including illegal monopolization of the markets for PC operating systems, Web browsers and software for word processing and other office programs. The brief also brings charges under federal copyright and state unfair-competition laws.
The suit is broader than previous actions by taking aim at Microsoft's ".Net" strategy for using the Internet to deliver banking, medical and other services over PCs, television sets and cell phones.
The .Net initiative, which Microsoft is building its entire product lineup around, competes with Sun's plan to deliver Web services, called Sun One.
"Microsoft is now exploiting its illegally maintained monopoly distribution channels to leverage the market share for its own" software platform for .Net, Sun's brief argues. Microsoft is including .Net features in future Windows products.
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