MS/DoJ Week 13 -- DoJ wins some points

The US Government continued to chip away at Microsoft's defense this week, getting Paul Maritz, the highest ranking Microsoft executive scheduled to appear as a witness, to acknowledge points that the US Department of Justice said are key to its broad antitrust case.

But Maritz, the head of applications and platforms at Microsoft, managed to keep his cool, insisting that the motives behind the software company's acknowledged pressure on Intel and other computer companies were more benign than the government makes them out to be.

The DoJ and the 19 states which have joined it in the antitrust lawsuit allege that Microsoft's actions show a pattern in which Microsoft attempts to convince rivals to back out of competition in exchange for favours from the software giant. The government also alleges that Microsoft illegally leverages its Windows monopoly in the desktop operating system market to dissuade companies from competing with it.

A key exchange during week 13 of the trial hinged on what Maritz, under cross-examination of lead government trial lawyer David Boies, conceded was Microsoft pressure on chip giant Intel to pull an Internet multimedia software product off the market in 1995. Boies got Maritz to acknowledge that Microsoft pressed Intel to back off of developing software called Native Signal Processing (NSP).

But Maritz also testified this week that Microsoft opposed NSP because it was developed to work with an outdated version of Microsoft's Windows operating system software, Windows 3.1.

"The issue here is that Intel would have made it difficult for the industry to migrate from Windows 3.1 to Windows 95 for a variety of reasons," Maritz said Wednesday.

On his part, Boies said he thought Maritz' responses to his questions this week showed inconsistencies in Maritz' testimony as well as in Microsoft's defense as a whole.

For example, Boies got Maritz to acknowledge that Microsoft was worried about the threat Netscape Communications' Navigator browser posed to the Windows platform.

Under questioning from Boies, Maritz said his impression at one point was that "Netscape was going to build out their (browser) platform in competition with us".

Speaking outside of the courthouse, Boies said this was important. "Microsoft spent the first third of its case trying to argue that Netscape, and Sun and Java weren't really a competitive threat -- they were these competitive alternatives that were going to die of their own weight."

Boies also pointed out that although Maritz denied it this week, two Intel executives testified earlier in the trial that they heard Maritz say Microsoft planned to "embrace and smother" Netscape.

Microsoft officials belittled what Boies trumpeted as major points.

"Microsoft had a motivation to compete against a company (Netscape) that was developing very popular software that not only competed as a browser but also is capable of competing more broadly as a general purpose platform," said William Neukom, Microsoft vice president of legal affairs.

The bottom line, Microsoft officials say, is that there is plenty of competition in the computer industry.

The week was capped today with a ruling by the US Court of Appeals for the District of Columbia, which upheld a decision by District Court Judge Thomas Penfield -- presiding in the current antitrust trial -- that depositions taken for the US Government antitrust case against Microsoft be made public. The ruling, in the wake of a motion made by several news organisations before the trial began, has lost some of its impact by now since many video clips of depositions -- including eight hours of Bill Gates' deposition, have already been shown in court.

This week, Microsoft Senior Vice President Jim Allchin, head of Windows development, is slated to take the stand. In written testimony released this week, he called integration "the holy grail of software development." Microsoft asserts that the Internet Explorer browser has been inextricably integrated into Windows, and to separate the two causes harm to the software.

"We believe that the tight integration of Internet Explorer technologies into Windows benefits customers, developers, and computer manufacturers in ways that simply cannot be achieved through the use of add-on products from third parties," Allchin said in his written testimony.

The government says that Microsoft has simply bundled the two products together, essentially giving the browser away for free in a scheme of predatory pricing cooked up to force Netscape -- whose first product was the Navigator browser -- out of business.

In an attempt to show that IE and Windows are not truly integrated, Boies is expected to question Allchin by referring to a Microsoft-created spreadsheet that details which files in Windows relate to the browser technology, which relate to the base operating systems, and which files contain functions related to both. The government won the right to see the spreadsheet this week.

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Marc Ferranti

PC World

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