MS, DoJ deliver closing arguments

The two sides in the Microsoft antitrust case squared off one last time to deliver closing arguments before US District Judge Thomas Penfield Jackson. Now, Jackson must decide whether Microsoft is a bullying monopolist that squashed competition and stifled innovation, or a software company struggling to survive, like many others, in a highly competitive industry.

In a packed ceremonial courtroom designed for large crowds, Judge Jackson sat silently while government attorneys told him why he should punish Microsoft for its anticompetitive acts, which they said resulted in substantial consumer harm.

The US Department of Justice and 19 states brought the lawsuit against the software giant, which went to trial last October 19. Testimony ended in June after 76 days of trial.

Throughout the morning, the government emphasised two key points: Microsoft's overwhelming dominance of the computer operating system market, and its propensity towards using that power to hamstring companies including Netscape Communications, Intel and Compaq Computer.

"Microsoft has maintained an unshakeable stranglehold on the market for PC operating system software," said Stephen Houck, an antitrust attorney representing New York state. Houck said that Microsoft has enjoyed more than a 90 per cent market share for its operating systems since 1991. The heavy-handed tactics Microsoft used to protect that share have dampened software innovation and caused substantial consumer harm, Houck said.

Houck, together with the government's lead trial counsel, David Boies, drew a narrative of Microsoft's actions. As was the case during the trial, the government attorneys used Microsoft's own memoranda and witness testimony against it. Throughout, they urged Judge Jackson to focus on the contemporaneous documents, and not on Microsoft's subsequent spin on its actions.

"Microsoft has taken its power over the operating system and used that power to squelch potential competition," Boies said. "We think that is exactly what the antitrust laws prohibit."

Boies spent much of the morning hammering at the infamous June 21, 1995 meeting between executives from Microsoft and rival Netscape Communications, saying the meeting offers "an insight into Microsoft's soul".

At that meeting, the government alleges, Microsoft attempted to strike a deal with Netscape that would have divided the Internet browser market between the two companies, giving Microsoft control of the browser market for Windows 95. Netscape, in turn, would agree to confine itself to the browser market for Apple Computer systems and earlier versions of Windows.

To drive home his point, Boies juxtaposed excerpts from the videotaped deposition of Microsoft Chairman and CEO Bill Gates, with memos written by Gates and other Microsoft executives before and after the meeting.

Gates, asked repeatedly during his deposition whether he saw Netscape as a threat to Microsoft, denied any concern, or even any knowledge, about Netscape's business plans in 1995.

"At this time, I had no sense of what Netscape was doing," Gates said.

Boies belied Gates' testimony with a memo Gates wrote in May 1995, entitled "The Internet Tidal Wave", in which Gates declares that a "new competitor born on the Internet is Netscape".

Boies displayed numerous exhibits showing Microsoft's executives discussing the best ways to stymie Netscape, including bundling Microsoft's Internet Explorer Web browser into Windows.

Boies said that Microsoft's sole reason for "welding" IE into Windows was to forestall any threats to Windows, not to make Windows a better product, as Microsoft has claimed.

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