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Saturday, October 30, 1999 < Prev Next >

Justice Dept. Eyeing Microsoft, Visio Deal

The Justice Department has decided to look into Microsoft's proposed $1.3 billion acquisition of Visio, a Seattle maker of diagramming software, the companies disclosed late yesterday.

The Justice Department, in the midst of suing Microsoft on antitrust-violation claims, has asked both companies to provide additional information about the acquisition.

"Both companies are required to supply additional information and documentation to comply with the request," Visio said in a press release yesterday evening.

Although the companies didn't disclose details about what the Justice Department requested, antitrust regulators typically examine how the proposed deal would affect prices and competitors.

In the Microsoft-Visio deal, it's likely that regulators have asked the companies to detail the size of diagramming software market, list their competitors and demonstrate how the deal won't preclude those competitors from selling their products.

"We don't believe this transaction raises any antitrust issues because Microsoft and Visio are not competitors," Microsoft spokesman Tom Pilla said.

Regulators often ask competitors for similar information. The Justice Department has the power to block deals or force companies to restructure them if it believes that combining the companies would hurt consumers.

Because Microsoft's Windows operating system is the dominant software powering personal computers, it is conceivable that the Justice Department is concerned that the deal might put other diagramming software makers at a disadvantage.

In its antitrust suit against Microsoft, the government contends the company has used Windows to give its Internet Explorer browser an advantage over Netscape Communications' competing browser.

Although Microsoft has invested in or acquired dozens of companies in recent years, regulators have rarely asked the company for additional information before granting approval. The last time was Microsoft's 1997 acquisition of WebTV, a deal that ultimately went through.

Regulators had until yesterday to seek more information, or the deal, announced in September, would have automatically passed antitrust scrutiny. Now the companies must scramble to supply the information. After it is submitted, regulators will have another 20 days to review the new information. Both companies expect the deal to close by January.

Jay Greene's phone message number is 206-464-3287. His e-mail address is jgreene@seattletimes.com

The Seattle Times

Source page: http://community.seattletimes.nwsource.com/archive/?date=19991030&slug=2992165