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Microsoft investigated over investment in rival Corel

Microsoft is being investigated by the US Department of Justice over antitrust concerns surrounding its involvement with Canadian software company Corel which produces WordPerfect, one of the few competitors to Microsoft Word, the market leading word processing package.15 Feb 2001

The Justice investigators have asked for Microsoft’s internal documents relating to a $135 million investment by Bill Gates’ company in Corel. A Microsoft spokesman said that his company believes there are no legal concerns with the deal.

Microsoft is already fighting its appeal against a federal court’s ruling that it abused its dominant position in relation to its operating system and web browser businesses.

Corel’s WordPerfect Office operates on the Linux platform, a competitor to Microsoft’s Windows operating system. Following the investment, which gave Microsoft a 24.6% stake in Corel in October 2000, the struggling Corel announced its intention to sell its significant Linux software unit.

Microsoft denies suspicions that its investment was conditional upon Corel ceasing to service the Linux market. In an attempt to avoid antitrust concerns, Microsoft acquired in Corel only shares without voting rights.