U.S. Outlines Potential Case Against Microsoft : Antitrust: Probe of Windows 95 is still pending, judge is told by Justice Department.

WASHINGTON — The Justice Department on Thursday outlined a theory of a potential antitrust case it could bring against Microsoft Corp., but told a federal judge its investigation was still pending.

Federal prosecutors are investigating Microsoft’s plan to include a program for accessing its Microsoft Network on-line system in the new Windows 95 software.

“The government believes that Microsoft’s forced inclusion of the MSN access software with [Windows 95] might, under certain facts, violate the antitrust laws, and Microsoft points to no potentially applicable exemption from those laws,” Assistant U.S. Atty. Anne K. Bingaman said in a filing to a federal judge in New York who Microsoft has asked to slow the investigation.

In addition, Bingaman told U.S. District Judge Robert Ward the Justice Department is investigating whether Microsoft may have violated a consent decree the two parties signed a year ago.

In that agreement, which settled a probe into pricing practices, Microsoft said it would change contracts with PC makers and eliminate some restrictions on other software makers.

The new details about the latest investigation come as Microsoft is just about to start production of Windows 95, due in stores on Aug. 24. It is the first major revision since 1990 to the program that runs the basic functions of tens of millions of personal computers.

In the court filing, Bingaman repeatedly states the government has yet to decide whether to file a case against Redmond, Wash.-based Microsoft, the world’s largest maker of personal computer software.

The company asked a federal judge last month to quash a civil subpoena the department had issued. The department’s requests cost “many millions of dollars” and had a group of 60 lawyers and paralegals putting in considerable overtime, Microsoft said in an earlier court filing.

At issue is whether software to access the Microsoft Network should be in the same package as Windows 95, which PC makers this fall will put on almost all new PCs to consumers and many new PCs for businesses, between 10 million and 20 million units.