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Gates, DOJ lead prosecutor duke it out

Antitrust prosecutors show more portions of videotaped testimony from Microsoft chief Bill Gates, in which he spars with questioners over his company's Internet strategy.

WASHINGTON--Setting the stage for testimony from a government expert, antitrust prosecutors today showed new portions of videotaped testimony from Microsoft chief executive Bill Gates in which he spars with questioners over his company's Internet strategy.

In about 50 minutes of the deposition, shown as the trial here entered its fifth week, Gates Microsoft's day in court and David Boies, the Justice Department's lead prosecutor, argue over the definitions of numerous terms, including "competition" and "non-Microsoft browsers".

In addition, Gates refused to admit that his company regarded Netscape Communications as a competitor in the browser market, until confronted by an email from one of his top lieutenants. "We need to look carefully at any significant opportunity to gain share vs. Netscape," Microsoft vice president of development Paul Maritz wrote in the email.

Presenting internal documents that contradict Gates's statements is becoming a common theme in the deposition of the software giant's CEO. At points in this morning's proceedings, the deposition seemed to amuse just about everyone in the courtroom, with U.S. District Judge Thomas Penfield Jackson as well as Microsoft lawyers laughing at the squabbling between Gates and his interviewers.

Outside the courthouse during lunch, Joseph diGenova, a former U.S. attorney hired by Microsoft, said the deposition was "not relevant to the case" and relied on "theatrics more than anything else." He said the government's frequent showing of the deposition was turning the trial into a "sideshow by focusing a personal attack on Bill Gates."

The portions of Gates's testimony played today are intended to support written testimony unsealed Friday from Glenn Weadock, president of Golden, Colorado-based Independent Software (See related story).

In the testimony Weadock said that bundling Microsoft's Internet Explorer with Windows provides "few real-world benefits and several significant real-world costs and risks" for corporate customers that do not standardize on the browser. Weadock rattled off some dozen companies he claimed were unhappy about the bundling. Microsoft claimed Weadock findings were "ill-informed."

The Justice Department (DOJ) and 20 states, which filed suit against Microsoft in May, claim the decision to fold a browser into the Windows operating system is part of a pattern of conduct that violates antitrust laws.

Following the showing of the video, Microsoft attorney Richard Pepperman spent the rest of the day challenging Weadock in cross-examination. For most of the day, the testimony covered technical details, such as whether an Internet technology known as TCP/IP was considered part of the operating system or was a separate application. Weadock said the protocol, which is what allows different computers on the Net to work with one another, was generally considered a part of most operating systems.

Microsoft's Pepperman pointed out that, as Microsoft has folded TCP/IP and other technologies such as memory management features into its operating system, demand for corresponding stand-alone products has diminished. The lawyer was attempting to show contradictions in Weadock's direct testimony, which suggested that Microsoft's real reason for "commingling" Internet Explorer and Windows was to shut out Netscape.

One of the only light moments of today's cross-examination came when Pepperman seized on Weadock's use of the word "commingle."

"Didn't you use the term 'commingle' in your testimony rather than integrate because 'commingle' sounds more pernicious?" Pepperman asked.

"No," Weadock answered, "there are many examples of delightful commingling."

Despite the technically arcane details, however, Weadock's testimony is crucial to the government's case. Antitrust law recognizes a "rule of reason," which allows even dominant companies broad freedom to design products when they are based on technical reasons, rather than on a desire to eliminate competition. Weadock's role in the government's case is to show that the bundling of the two Microsoft technologies is without any technical justification.

The new portions of Gates's deposition focused on Microsoft's attempts in early 1996 to win market share for Internet Explorer. Boies sparred with an evasive Gates over how important the goal was to Microsoft and whether the Redmond, Washington-based company specifically regarded Netscape as a competitor.

In one email, dated July 1996, Gates See CNET Radio:
Our Man in Washington told Maritz that "winning Internet browser share is a very, very important goal for us." Gates acknowledged that the email in question was his, but said it "doesn't appear to directly or indirectly refer to any other companies."

Boies then referred to another part of the email that noted many computer sellers "are bundling non-Microsoft browsers" and featuring them in ways that are more prominent than Microsoft's.

"What non-Microsoft browsers were you concerned about in January of 1996?" Boies asked.

"I don't know what you mean 'concerned,'" Gates answered.

When Boies later rephrased the question, Gates protested: "You keep trying to read Netscape into that sentence and I don't see how you can do that."

Finally, Boies introduced the email from Maritz, which suggested a careful gaining of "share vs. Netscape" and advised to "think carefully before AOL [America Online] goes off and partners with Netscape." Still, Gates refused to budge, saying the email concerned computer sellers "prominently featuring the AOL client in such a strong way that anything we would do for AOL in that regard would be of no impact."

Microsoft is expected to finish its cross-examination of Weadock by noon tomorrow. After that, the government is expected to show another eight minutes of Gates's deposition relating to Sun Microsystems' Java programming language. Tomorrow's portions are expected to relate to testimony of IBM director of network computing services John Soyring, the government's next witness to be called.