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Gates: Remedies would bar behavior

He's critical of remedies proposed in Microsoft's antitrust trial. But the chairman acknowledges that some restrictions would have prevented behavior earlier deemed illegal.

WASHINGTON--Although he's highly critical of the remedies proposed by nine states and the District of Columbia in his company's antitrust trial, Microsoft Chairman Bill Gates acknowledged Tuesday that some of the restrictions would have prevented the company from engaging in behavior that an earlier court deemed illegal.

In cross-examination during his second day on the witness stand, Gates reluctantly said the proposed remedies would have kept Microsoft from threatening to cease development of Mac Office if Apple Computer had not installed Internet Explorer on new computers.

Similarly, Gates said, Microsoft would not have been able to bully Intel into stopping development of software that could have competed against Windows. Both actions were found to be illegal during the trial phase of the four-year antitrust case.

Gates, though, added that the settlement Microsoft reached with the Department of Justice also would have restrained the company in a similar manner.

Gates further testified that Netscape's Internet browser and Sun Microsystems' Java software represented a competitive threat against Windows. In his written testimony, submitted Monday, Gates wrote that the two technologies "supposedly" posed a competitive threat.

In 2000, a federal court found that Microsoft violated antitrust laws by using its heft in operating systems to capture the market for Web browsers. Following the conclusions and a series of appeals, the Redmond, Wash.-based software giant and the Department of Justice hammered out a settlement agreement in November 2001.

Rather than sign on to the settlement, nine states and the District of Columbia decided to pursue the case and proposed their own remedies. Among other restrictions, this group is seeking a proposal that would prevent Microsoft from retaliating against companies that adopt competing technologies and would require Microsoft to support a wider variety of Windows.

see special coverage: Microsoft, DOJ reach settlement Like previous witnesses, Gates first submitted written testimony and then took the stand to be cross-examined orally. Also like some other witnesses, Gates made statements that have seemingly dented his credibility.

When he first took the stand Monday, Gates was the picture of professorial cool, holding in his temper, which had hurt him earlier in videotaped depositions.

Gates remained highly critical of the states' settlement proposal, however, calling it ambiguous and "impossible" for Microsoft to follow.

The company would be forced into a game of "endless second-guessing" every time it changed a product to determine whether it was violating the law, Gates said. Design efforts in the early stages of a product might later inadvertently hurt third parties and be deemed violations of the law under the proposal, he said.

"We're allowed to make mistakes," the billionaire said.

Microsoft's attorney, Dan Webb, strongly objected to some of the questioning directed at Gates. "We are using the word 'supposedly'...to re-litigate the entire Netscape and Java case," he said at one point. But his objection was overruled.

Steven Kuney, the attorney for the states, also asked Gates whether older versions of Windows should be made available to consumers at a lower price.

"That's not a choice you want consumers to make, is it, Mr. Gates?" Kuney asked.