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Feds: Microsoft wanted to "thwart innovation"

Government attorneys cut to what they see as the core of the landmark antitrust trial against the software giant.

WASHINGTON, D.C.--U.S. District Court Judge Thomas Penfield Jackson today kicked off closing arguments in the Microsoft trial with a joke.

"Please tell us how you spent Microsoft's day in court your summer vacation," Jackson asked government attorney Stephen Houck.

But the government was in no mood for levity, instead cutting to what it sees as the core of the landmark antitrust trial against the software giant. "At its heart, this case is about thwart innovation that threatened [Microsoft's] monopoly," said Houck.

Houck and David Boies, lead prosecutor for the Justice Department (DOJ), summed up the case thus:

• Microsoft is a monopoly.
• Microsoft engaged in anti-competitive behavior to crush rival Netscape.
• Microsoft attempted to force Netscape to divide the Web browser market.
• Microsoft used exclusive contracts with PC manufacturers and others to stifle perceived competition.

Boies zeroed in on a June 21, 1995, meeting with Netscape executives at which the government alleges Microsoft sought to divide up the browser market.

The meeting "provides a context for everything that went ahead?and an insight into Microsoft's soul," said Boies.

The prosecutor methodically reviewed email evidence, document exhibits, and taped depositions introduced at trial to make his points. Microsoft's motive was "to prevent the commodification of Windows," said Houck.

Netscape rebuffed Microsoft as the company leveraged its monopoly power, the lawyers alleged.

The two attorneys alleged that Microsoft--fearful that the Navigator browser would become a popular platform for developing software programs--used anti-competitive behavior to thwart its smaller rival.

Had Netscape succeeded in wooing software developers to develop operating-system-neutral applications it "would force Microsoft to slash prices and commoditize Windows," said Houck.

"This case, like all cases, is about the real world," Boies told the judge. "This case is about facts and common sense in the real world."

In that world, there are two major ways to distribute Web browsers: PC manufacturers and software developers, said Boies.

Boies reviewed evidence showing how Microsoft rewarded those companies which favored its Internet Explorer browser and punished those favoring Navigator.

Microsoft lead lawyer John Warden said changes in the high-tech landscape have made the case moot. "America Online's acquisition of Netscape has rendered ridiculous" the government's claim that Microsoft holds a monopoly, he said.

Jackson is expected to announce his findings of fact in a matter of weeks. There will be more written briefs and arguments before the he reaches his conclusion of law.

Reuters contributed to this report.