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PRECEDE New York Microsoft is Target of FTC Investigation

March 12, 1991

REDMOND, Wash. (AP) _ Microsoft Corp., the largest supplier of software for personal computers, is the target of a Federal Trade Commission investigation into its competitive practices, the company said today.

Microsoft is complying with requests made as part of a non-public FTC investigation, the company said in a news release.

The company received a letter in June advising it of the investigation and requesting its cooperation, the release said.

Microsoft said it believes the FTC probe was prompted by a news release issued at an electronics-industry trade show in November 1989 that discussed the future of Microsoft’s OS-2 and Windows personal computer programs.

The FTC indicated it was interested in whether Microsoft had been restricting functions and features of future versions of Windows, the company’s release said.

OS-2 is an operating system for personal computers that allows them to run other types of software, such as word processors and spreadsheets. Windows, one of Microsoft’s more successful programs, provides a graphics-based system for running other types of software.

The Wall Street Journal reported today that unidentified executives with software companies who have been contacted by the agency said the FTC appears to be looking into allegations that Microsoft is manipulating the industry.

The report said the executives told the newspaper the inquiries focus on Microsoft’s role as a major supplier of both system software, which controls the basic operations of a personal computer, and applications software, such as word processing or spreadsheet programs.

The FTC is trying to determine whether Microsoft’s clout in systems software gives it an unfair advantage in the applications business, the newspaper said.

In addition to supplying OS-2, Windows and MS-DOS, another type of operating system, Microsoft is the fastest-growing applications software supplier.

The newspaper said the FTC’s antitrust chief, Kevin Arquit, declined to comment, citing the agency’s policy of not discussing pending investigations.

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