MS/DOJ: Microsoft goes on counterattack

Microsoft Corp. today, in its opening statement in the antitrust trial against it, accused the government of making a personal attack on company chairman and Chief Executive Officer Bill Gates, distorting e-mail and taking evidence out of context.

John Warden, Microsoft's lead attorney, said the government's opening arguments yesterday were "long on rhetoric and short on substance".

"The effort to demonise Bill Gates in the opening statements is emblematic of this approach," Warden said. A "personal attack" is no substitute for proof, he said. Microsoft concluded its opening statement just before noon today.

Netscape Communications Corp. CEO Jim Barksdale was expected to be called as the first witness this afternoon. The government yesterday focused significantly on a June 1995 meeting that Microsoft had with Netscape Communications Corp. in which it alleged that Microsoft made an effort to divide the market.

In the morning session here today, Warden said that Microsoft believes that the court will conclude "that this is not really an antitrust case but a return of the Luddites," referring to a 19th century antitechnology group. He said the government's case is "a misconstrued attack" on the creation of innovative new products.

Microsoft today made a point-by-point rebuttal to the major charges raised by the federal government and 20 states in their antitrust lawsuit. The trial opened yesterday, five months after the US Department of Justice and 20 state attorneys general filed broad antitrust actions against Microsoft in US District Court in the District of Columbia. The actions have been joined in the current trial.

Microsoft is fighting charges that it broke antitrust laws and restrained trade by tying its browser, Internet Explorer, to its operating system. The government alleges that Microsoft used a variety of exclusionary agreements with equipment manufacturers, Internet Service Providers (ISPs) and content providers to accomplish this.

Warden pointedly attacked the government's account of the a June 1995 meeting that Microsoft had with Netscape, during which, the government alleges, Microsoft made an effort to convince Netscape to divide the market.

Warden said, "the first and undisputed fact" was that "nothing of the kind was agreed to or ever occurred".

Warden characterised Netscape's account of the meeting as "fantastical". He said there was no proposal by Microsoft that Netscape cease development of browser software for Windows 95.

"There was no cessation in assistance to Netscape and its work on that software," Warden said.

Warden refuted directly a couple of pieces of the e-mail evidence introduced in the court yesterday, in particular citing a Microsoft memo in which a company official said, "We will do something to make this hard in Memphis," referring to the possibility of making Netscape's Navigator browser difficult to operate in Windows 98 (code-named Memphis).

"The fact of the matter is we didn't," Warden said.

Warden, who characterised the government's documentation of its case as a "crazy quilt of e-mail fragments", urged Judge Thomas Jackson to view the evidence with "considerable skepticism".

Warden also was dismissive of the videotape that the government presented yesterday showing Bill Gates saying he first learned of the allegations that Microsoft attempted to divide markets with Netscape through the Wall Street Journal. "There is nothing that will come into evidence to impeach that," Warden said. "There is no report in Microsoft to divide markets."

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