DOJ assault opens Microsoft trial
Government attorneys waste no time in laying into Microsoft, detailing the software giant's alleged attempts to illegally maintain a monopoly.
In opening arguments lasting more than three hours, Justice Department special prosecutor David Boies outlined scores of documents detailing Microsoft's dealings with numerous partners, including America Online, Intel, and Apple Computer. Microsoft attorneys are expected to present a rebuttal argument when trial reconvenes today.
One of the most explosive allegations Boies introduced is that Gates asked America Online executives to knock Microsoft rival Netscape Communication out of the browser market.
Early on in his argument, Boies urged Jackson to be wary of Microsoft's defense, and used Gates's videotaped testimony as proof that Microsoft executives are not to be believed. In one clip, Gates claimed he had known nothing about a proposal to carve up the browser market until he had read an article in a business newspaper. Market allocations, Gates said in his deposition, "would be against company policy."
In another clip, Gates claimed he "had no sense what Netscape was doing" in June of 1995 when the meeting between Microsoft and Netscape took place.
Boies then cited several internal Microsoft messages from 1995 in which Gates and other top executives list in detail their worries that Netscape's Navigator might threaten the dominance of Windows. As a May 1995 memorandum made clear, "Microsoft and Mr. Gates personally were directly concerned about the threat that Netscape posed," Boies said.
Regarded as an antitrust wizard who successfully defended IBM against a 13-year antitrust suit in the 1970s, Boies also cited Microsoft messages in which Gates allegedly discusses Microsoft's pitch to Netscape to divide the market. "We could even pay them money as a piece of the deal," Gates is alleged to have written in one note.
 Bill Neukom meets with reporters. AP |
In recent weeks, Microsoft has accused the government of entirely rewriting its case.
"The relevant evidence, the admissible evidence, will show that Microsoft is a vigorous but a very fair competitor," Neukom told reporters outside the court.
Steve Houck, an assistant attorney general from New York, also made opening remarks today, arguing that the Microsoft antitrust case has important implications for the information age. "Microsoft is now poised to extend its monopoly to the Internet," Boies said, adding that, unlike the government's suit against IBM, this case would be short.
Meanwhile, government attorneys further
accused Microsoft of stonewalling their attempts to obtain information contained in databases that have been hotly contested for more than two months. Despite an order Jackson issued last week requiring Microsoft to hand over the data, the government said it still has not received it.
"Microsoft's intransigence thus far has forced plaintiffs to file two separate motions to compel production of the information," the government's brief claims. It asks that Microsoft be ordered to provide the information exactly as it is presented in Microsoft's database.
The Justice Department (DOJ) will try to prove that Microsoft illegally has maintained a monopoly in the desktop operating system market and used deliberate, predatory tactics to develop new monopolies in other markets. Microsoft contends that it rose to prominence by offering the best software products on the market and that it has done nothing illegal to gain market dominance.
The trial is expected to last four to eight weeks, but many observers say the case--no matter what the outcome--ultimately will wind up in the Supreme Court.
Ever since the government filed suit in May, the Microsoft antitrust case has attracted massive attention. Some observers have likened it to previous antitrust lawsuits against AT&T, IBM, and even Standard Oil. The implications are significant for the future of the high-tech industry and the development of electronic commerce.
The government originally sought rulings that would require Microsoft to separate its Internet Explorer
browser from its Windows operating system, or to make other concessions. In a ruling filed last week, antitrust prosecutors said they plan to push for additional steps that would keep Microsoft from abusing monopoly power should the government emerge from the lawsuit victorious.Despite its arcane nature, the case is packed with drama.
For starters, the trial is taking place in the same federal courthouse where former White House intern Monica Lewinsky testified about her relationship with President Clinton.
| Microsoft trial witness table | |
| Government witnesses James Barksdale David Colburn David Farber Franklin Fisher Edward Felten James Gosling William Harris Steven McGeady John Soyring Avadis Tevanian Glenn Weadock Frederick Warren-Boulton | Microsoft witnesses Bob Muglia Eric Engstrom Richard Schmalensee Paul Maritz James Allchin Joachim Kempin Brad Chase Cameron Myhrvold William Poole Daniel Rosen John Rose Michael Devlin |
The case also features personalities such as Microsoft cofounder and chief executive Bill Gates. The world's wealthiest person, valued at more than $50 billion, Gates has become a baron for a new era in which high-technology reigns supreme as a leading economic driver.
James Barksdale, chief executive at Netscape Communications, yesterday featured prominently as leader of the Web browser upstart that claims to have beaten Microsoft to the punch with software designed to surf the Internet.
Microsoft is expected to offer evidence that the company already had planned to introduce Web browsing software and to incorporate it into its Windows operating system before Netscape burst onto the scene. Microsoft also is likely to characterize Netscape's own missteps as the reason for the success of Microsoft's Internet Explorer Web browser, rather than any predatory practices by the company.
Overall, the government is expected to introduce more than 1,200 exhibits as evidence.
Judge Jackson has allowed each side 12 witnesses and two surprise rebuttal witnesses that will testify later in the trial. Microsoft and government "trustbusters" already have submitted initial written testimony for their witnesses to Judge Jackson. To expedite the proceedings, the written testimony will serve as "direct examination" in the case, sparing the time-consuming task of oral testimony.
The government's witnesses will be the first called to the stand. They will be cross-examined by Microsoft's attorneys, then government prosecutors will have a chance to redirect questioning. At that point, Microsoft's legal team will be allowed to "re-cross," or cross-examine the witnesses one final time. Once the government rests its case, the reverse will be true for Microsoft's witnesses.
Sources said they expect each witness's testimony to last between two and four days, depending on the intensity of the questioning and the importance of each witness's testimony to the case.
Both parties finalized their witness lists last week, but only after some last-minute jockeying. When the government added new witnesses from Apple Computer and Sun Microsystems, Microsoft argued that government lawyers were attempting to broaden the scope of the case beyond the allegations detailed in the original filing in May.
The software giant asked Judge Jackson for an additional two-week delay to prepare for what it called new allegations, but the judge declined the request. Sources said that, at the final pre-trail conference last week, Jackson told the company, "We'll see you Monday."
Jackson's apparent eagerness to get the trial under way is just one factor that has been fueling wild speculation about what fate could come to Microsoft if the government is awarded a victory in the case.
The severity of the charges Microsoft faces raises the prospect that, if the government wins, it could seek the ultimate remedy of breaking up the software giant--a remote but nevertheless feasible possibility.
"I think that the chances of a court ultimately imposing a structural breakup are less than one in five, but the consequences would be so severe the company has to take it very seriously," said William Kovacic, an antitrust specialist at George Washington University Law School.
Microsoft has said it has internal communications that show it initiated plans to become a major browser player and integrate its Internet Explorer program with its Windows operating software before it had even heard of Netscape.
But the Wall Street Journal reported today that America Online had provided evidence to the government that supports Netscape's version of what happened at a June 21, 1995, meeting between Netscape and Microsoft that is expected to be a major feature of the case.
CNET News.com confirmed independently that a Netscape engineer told an AOL executive that Microsoft "would crush them" if Netscape did not cooperate with Microsoft in providing a board seat and make available its plans.
Microsoft repeatedly has denied Netscape's version of events.
Separately, the Wall Street Journal reported that a Italy's International Alliance for Compatible Technology (IACT) filed an antitrust complaint last week in Rome, making allegations similar to the the DOJ's case.
A lawyer with the Italian firm that filed the complaint said the case falls under the country's jursidiction because of the "Italian characteristics" of software in question, namely Windows and Internet Explorer. A Microsoft spokewoman said the case appears like one being considered by the European Commission, and that the company will defend itself, the Journal said.
News.com's Dan Goodin reported from Washington and Corey Grice from San Francisco. Reuters contributed to this report.