Microsoft: Netscape set us up

Microsoft uses new evidence to claim that internal Netscape documents prove Netscape tried to set the software giant up.

4 min read
WASHINGTON--Microsoft today claimed that new evidence unearthed in its antitrust battle with the government proves that a disputed 1995 meeting at the heart of the case was in fact a "set-up" orchestrated by Netscape Communications to persuade the Justice Department to sue the software giant.

The software giant also called the belated disclosure of the documents "outrageous" and asked U.S. District Judge Thomas Penfield Jackson to sanction the government for its failure to turn over the evidence.

On the fourth and final day of cross examination of Netscape chief executive Jim Barksdale, Microsoft attorney Microsoft's day in court John Warden also hammered away at other claims Barksdale made in 127 pages of direct testimony. Specifically, Warden suggested that America Online and financial software maker Intuit chose to work with Microsoft's browser because Netscape engineers were unable to deliver the best code. Earlier, Barksdale had claimed that Microsoft used its monopoly power to land the deals.

Barksdale is expected to leave the stand tomorrow, making room for the government to begin showing videotaped testimony of Microsoft chairman and chief executive Bill Gates. Before that happens, however, the government still must "redirect" questions to Barksdale, a process that is expected to last throughout the morning. Warden will then finish the process when he "recrosses" Barksdale.

To start the second week of the landmark trial, Warden introduced newly discovered documents--including both letters and email messages--in which Netscape attorneys discuss the June 21, 1995, meeting just days after it took place. He also introduced a civil subpoena that the Justice Department (DOJ) sent to Netscape one day after the meeting.

In a court brief filed today, Microsoft said that company attorneys learned of the documents this past Saturday, months after the software giant had subpoenaed them from the Justice Department. The brief went on to ask that the government be sanctioned for the omission, claiming it was "nothing short of outrageous."

Microsoft's displeasure with the new evidence is understandable. Last week, Warden had attempted to suggest that Microsoft's alleged proposal was a mere "concoction," pointing out to Barksdale that it took months for him to report it to his attorneys and government investigators.

But in one of the newly produced documents--a letter sent to Justice Department investigators two days after the meeting--a Netscape attorney described Microsoft's alleged attempt during the meeting to "control Netscape's ability to compete against Microsoft," and included with it notes Netscape cofounder Marc Andreessen took during the episode.

Warden also introduced an email sent less than 24 hours after the June 21 session, in which Andreessen sent the notes to two company attorneys. The evidence appears to show that Netscape, in fact, did notify both its attorneys and government investigators of the alleged proposal.

Microsoft, however, claimed that the new material bolstered its case.

"Isn't it a fact that the June 21, 1995, meeting was held for the purpose of creating something that could be called a record and given to the Department of Justice to spur action against Microsoft?" Warden asked.

"That's absurd," Barksdale replied.

Microsoft long has claimed that government lawyers filed their lawsuit against Microsoft at the behest of only a handful of competitors, including Netscape.

"Although the government apparently saw some tactical advantage in producing the letter when it did, Mr. Reback's letter undercuts, rather than supports, the government's version of the June 21, 1995, meeting," Microsoft went on to argue in the brief it filed today. It pointed out also that "Mr. Reback's letter says absolutely nothing about dividing markets."

It noted that Reback claimed Microsoft threatened to withhold access to APIs, or application programming interfaces, unless Netscape agreed to its terms.

"Of course, the only reason Netscape would need access to those APIs was if it was building a version of Navigator to run on top of Windows 95, which is precisely what the government contends Microsoft was ordering Netscape not to do," the brief argued.

In a reply brief, the government called Microsoft's motion "a cynical attempt to distract attention from a document that damages its defense." It claimed that its investigation of Microsoft in the summer of 1995 concerned Microsoft's plans to place its Microsoft Network icon on its Windows operating system, and that documents surrounding that investigation were not covered by Microsoft's subpoena in the current case.

Warden also spent time discussing contracts Microsoft signed with AOL and Intuit, suggesting that those companies chose to use Internet Explorer due to its superior technology. Specifically, Warden established that Internet Explorer was able to be "componentized," meaning it could be easily broken down and integrated into other companies' software. Netscape's browser lacked this ability at the time the contracts were signed.

Warden also referred to a list of "drop-dead requirements" Intuit had supplied to Netscape if it wanted to land the deal, and later used an internal Netscape document to suggest that company engineers were unable to meet them. The document, titled "Intuit Situation," listed a number of technical specifications Netscape had failed to deliver in order get the deal, including a "super kiosk mode," a "chromeless child window," and an "OLE server."

Today's session was not without its light moments. Near the end of the day, Warden introduced a message that an apparently disgruntled Netscape employee submitted to a message board that criticized Navigator. The message, posted to Netscape's "Bad Attitude" list, claimed "Navigator is faster" than Internet Explorer. But a footnote attached to the assertion clarified that the browser was only faster "than a dog with no legs. If the dog's up to its waist in treacle. And dead."