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Microsoft is up to the same old anticompetitive bundling tricks with its upcoming Windows XP, claims a group of its competitors--who are trying to convince state and federal attorneys general to file a second antitrust suit against the software giant.

ProComp, a group backed by Microsoft rivals including Oracle and Sun, made its pitch to U.S. state attorneys general at their annual meeting in Vermont this week. The organization complains that Microsoft's plans to bundle messaging and media applications with its next operating system is a move to extend its monopoly power into other markets.

Microsoft denies the accusation.

"It's disappointing, but not surprising, that our competition continues to use time and resources to press lawmakers rather than innovate," says Jim Cullinan, a Microsoft spokesperson, responding to ProComp's visit to Vermont.

Mike Pettit, ProComp's president, says Microsoft is again using its monopoly power in the PC operating systems market to stifle competition, this time with the Windows XP operating system. He delivered a pile of paperwork to attendees.

He would not comment on whether the state attorneys general were receptive to his presentation but says he plans to return to their meeting Thursday to answer more questions.

"I'm not in the position to summarize their response," Pettit says. "Those are judgments they have to make on their own." Attorneys general attending the meeting could not be reached for comment.

Recalling the Browser Wars

Part of Microsoft's strategy with Windows XP parallels the one used in 1996 when it tightly integrated its Internet Explorer Web browser with Windows, Pettit says. By giving its browser software away free with the operating system, which was used on almost 90 percent of all PCs, Microsoft helped crush a competing browser from Netscape.

That behavior contributed to the company being branded a predatory monopolist by a U.S. District Court. Judge Thomas Penfield Jackson accepted the recommendation of the U.S. Justice Department and the 19 attorneys general who are plaintiffs, ruling last spring that the company should be split in two. Microsoft has appealed the ruling, and the penalties are set aside during the appeal.

"We've identified a number of additional violations of the law and we will bring them to the attention of lawmakers," Pettit says. "If they agree, they have to decide what to do."

Windows Features Worry Rivals

Windows XP incorporates multimedia functions and utilities that were previously distributed separate from the operating system. In fact, a number of these--such as Windows Media Player--are also bundled with Windows Millennium, the operating system's predecessor.

"What is considered the plumbing today and what will be considered the plumbing tomorrow is going to evolve," Microsoft's Cullinan says in response to ProComp's criticism about the expanded functions of the operating system. "These things that we add are just natural, next steps when looking at the future of the operating system. What operating system can be viable without all of those things?"

Microsoft plans to include with Windows XP a version of its MSN Messenger, an instant messaging application that competes with America Online Instant Messenger and Yahoo Messenger.

Relations between Microsoft and AOL are reportedly tenuous, as contract negotiations reportedly collapsed recently. At issue are whose browser AOL will feature with its client software--Microsoft IE or Netscape, which AOL now owns--and whether AOL will continue to have an icon presence on the Windows desktop.

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