Famous for the Netscape Navigator browser, Netscape was acquired by AOL in 1999.
Microsoft's illegal anticompetitive practices were confirmed in a ruling by a federal district court in June 2000 and upheld by a US appeals court in June 2001. Netscape argued in its lawsuit yesterday that those anticompetitive practices "resulted in harm to competition and antitrust injury to Netscape in particular".
"The district court found that liability in connection with Microsoft's conduct was in large part directed at suppressing Netscape," said Mark Schechter, a partner at the law firm Howrey Simon Arnold & White in Washington DC. "The court of appeals affirmed it. It's not surprising it [Netscape] would piggy-back on those findings."
Microsoft declined to comment on the lawsuit in detail, but said it was disappointed at AOL's course of action. "The company has been using politics and legalese to compete against Microsoft for years. It's our feeling that this is just the next tactic in their plans," Microsoft spokesman Matt Pilla said.
Netscape is seeking an injunction against Microsoft and an award of "treble damages", a type of award given in a private antitrust case that would be equal to three times any damages set by a court. A federal judge would determine the value of such damages and any Microsoft products that might be enjoined from shipping as a result of the suit, the company said.
The injunction Netscape is seeking resembles a settlement offer submitted in December by the nine states that have yet to agree on settlement terms with Microsoft. That offer included restrictions on how Microsoft would be able to sell Windows to consumers and PC makers
The lawsuit includes seven counts alleging that Microsoft used illegal anticompetitive behaviour to harm Netscape. The alleged pattern of behaviour started in 1995, when Microsoft began promoting its own Internet Explorer browser in a way that Netscape argues was detrimental to its own product.
"Netscape was the clearest target of the actions that the court found illegal," Stanton said. "Many of us have been speculating since the court of appeals (affirmed the lower court ruling) that the potential private plaintiffs would have a much easier time bringing their private lawsuits."
Netscape has the upper hand in its private antitrust suit because past court rulings against Microsoft have already established that it violated antitrust laws, Stanton said. What will be difficult to determine is what damages should be awarded as a result of Microsoft's anticompetitive behaviour, he said.
"The question is going to be proving what monetary loss Netscape sustained," Bittman said.