That Microsoft pressured partners Intel, Apple, and Intuit not to use Netscape's Navigator or versions of Sun Microsystems' Java that conflicted with Microsoft's Internet goals.
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.
"This is not something that [low-level Microsoft managers] did on their own or, in Mr. Gates's words, 'against company policy,'" Boies argued. "This is something they are being directed by the top management to do."
Boies also detailed email that reflected Microsoft's sometimes rocky relationship with chip giant Intel, which was interested in several Internet technologies that Microsoft viewed as a threat. According to one internal Intel memorandum recording a meeting between Gates and Intel's then-chief executive Andy Grove, Gates allegedly made "vague threats" to Intel if it did not back away from the technologies--which included chip instructions called NSP or native signal processing and software that optimized Java multimedia software for Intel's microprocessors.
Under federal antitrust laws, it is not illegal simply to possess a monopoly. But companies run afoul of the law when they intentionally try to maintain that monopoly or use it to leverage new monopolies. It also is illegal under the laws for any company, large or small, to collude with competitors to fix prices or divide up markets.
Although the government has yet to prove that Microsoft holds a monopoly for Windows, Boies said he will prove in trial that Microsoft's Windows market share has been more than 90 percent for the past decade.
Microsoft is expected to begin its rebuttal argument tomorrow. The court will convene Mondays through Thursdays throughout the case, with no proceedings slated for Fridays.
Microsoft, for its part, has expressed confidence that it will prevail.
Microsoft general counsel William Neukom today said Boies's arguments were
inaccurate and failed to raise anything new.
The evidence was "a lot of
snippets taken dangerously and unreliably out of context," Neukom said on
the courthouse steps immediately following today's proceedings. He added
they were the "same old tired allegations. There is nothing new."
Bill Neukom meets with reporters. AP
In recent weeks, Microsoft has accused the government of entirely rewriting
"The relevant evidence, the admissible evidence, will show that Microsoft is a vigorous but a very fair competitor," Neukom told reporters outside the court today.
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
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 will convene 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 |
chief executive, Netscape Communications
senior vice president of business affairs, America Online
professor of telecommunications, Univ. of Pennsylvania
professor of economics, MIT
assistant professor of computer science, Princeton Univ.
vice president and fellow, Sun Microsystems
president and CEO, Intuit
vice president of content group and health technology
director of network computing services, IBM
senior vice president of software engineering, Apple Computer
president, Independent Software
principal, Microeconomic Consulting Research & Assoc. (MiCRA)
senior vice president for applications and tools, Microsoft
general manager for multimedia, Microsoft
professor of economics and management, MIT
group vice president, platforms and applications, Microsoft
senior vice president, personal and business systems, Microsoft
senior vice president, OEM sales, Microsoft
vice president, developer relations and Windows marketing, Microsoft
vice president, Internet customer unit, strategic relations, Microsoft
senior director, business development, Microsoft
general manager, new technology, Microsoft
senior vice president and group general manager for enterprise computing,
The case 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
for a new era in which high-technology reigns supreme as a leading economic
James Barksdale, chief executive at Netscape Communications, will be
featured prominently as leader of the Web browser upstart that claims to
Microsoft to the punch with software designed to surf the Internet.
Microsoft is expected to offer evidence that the company already had
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
practices by the company.
A source said Barksdale is expected to be the government's first witness.
Overall, the government is expected to introduce more than 1,200 exhibits as
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
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
final time. Once the government rests its case, the reverse will be true for
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
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 trustbusters were 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
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 today 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.
News.com's Dan Goodin reported from Washington and Corey Grice
from San Francisco. Reuters contributed to this report.