The judge presiding over the Microsoft antitrust trial has said in comments before recessing the case for the holidays, that the proposed merger of America Online and Netscape Communications "could have an immediate effect on the definition of the market".
US District Court Judge Thomas Penfield Jackson said that he expects attorneys for the government and Microsoft to come to agreement about what documents regarding the merger Microsoft attorneys may review.
"We are all aware that there has been what might be a significant change in the playing field, as far as the industry is concerned," Jackson said in court after hearing a Microsoft motion to make AOL-Netscape merger documents subject to discovery. "In order for the AOL-Netscape deal to be brought to fruition, government approval is required. It seems the Department of Justice will be in possession of the operative documents and that Microsoft may have the right to review them."
Instead of ruling on the motion, Jackson said he hoped lawyers from both sides could agree among themselves. David Boies, attorney for the Justice Department, told Jackson he believed both sides could agree.
The trial now stands in recess until January 4 when the government is expected to call as a witness William Harris, chief executive of personal-finance software maker Intuit.
Instead of a live witness, the government has played videotaped depositions from a variety of computer executives during the past two days. But in a surprise move, the government chose to submit the remaining deposition excerpts it intended to play this afternoon in written form and court was abruptly recessed after Jackson heard motions in the case.
Microsoft was quick to claim that the turn of events benefited its case.
"We believe the AOL-Netscape-Sun deal demonstrates that competition is alive and well in this industry and that the government's attempts to regulate this industry are always five steps behind," said Mark Murray, a Microsoft spokesman, on the courthouse steps.
"All three companies sent representatives to testify that they could not compete against Microsoft but now they are joining forces," Murray said, adding: "The judge should be able to see what they have been doing behind closed doors to attack Microsoft."
But government trial attorney David Boies was quick to counter that the documents may not end up showing details that will be helpful to Microsoft's case.
"It may be the evidence shows that Netscape was not viable," because, due to Microsoft's actions, they had to give away their browser for free, he pointed out. "All of the elements regarding the way the industry looks are going to be relevant. The judge is going to have as much up to date information as possible."