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8/30/2005
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Microsoft Acknowledges Threats From Firefox And Security Lawsuits

In a filing to the SEC, Microsoft for the first time ever acknowledged that Mozilla's browsers pose a competitive threat. The company also said that security vulnerabilities in its own products leave it open to litigation.

In recent filings with the Securities and Exchange Commission (SEC), Microsoft for the first time acknowledges that Mozilla's browsers pose a competitive threat and the software giant also notes that security vulnerabilities leave it open to legal action.

"Competitors such as Mozilla offer software that competes with the Internet Explorer Web browsing capabilities of our Windows operating system products," said Microsoft in the annual 10K Form it's required to file with the SEC. This is the first time that the Redmond, Wash.-based developer has referred to Mozilla by name in an SEC filing.

Although Microsoft last year named Linux as a competitive threat on the client side, Mozilla's browsers, particularly Firefox, only climbed out of obscurity to grab 8-10 percent of the browser share after Microsoft filed 2004's 10K.

Note, too, that Microsoft didn't name its browser only as "Microsoft Internet Explorer" as it had in past filings, but called it "Internet Explorer Web browsing capabilities of our Windows operating system products." That nomenclature jibes with Microsoft's position that the browser is an integral part of the operating system, and is likely to continue to be.

Microsoft also added new text to the security section of the 10K Form, and for the first time said that it faced legal threats from continued security vulnerabilities.

"…actual or perceived vulnerabilities may lead to claims against us. While our license agreements typically contain provisions that eliminate or limit our exposure to such liability claims, there is no assurance these provisions will be held effective under applicable laws and judicial decisions," the 2005 filing read.

In comparison, 2004's 10K only said that security problems, " actual or perceived…could lead some customers to seek to return products, to reduce or delay future purchases, or to purchase competitive products."

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