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DOJ counters "set-up" claims

Government attorneys introduce evidence designed to combat charges that Netscape "imagined" events at the core of the historic antitrust trail.

WASHINGTON--Now that Netscape Communications chief Jim Barksdale has left the witness stand, Apple Computer and America Online appear to be taking center stage in the antitrust trial against Microsoft under way here.

With Barksdale on the stand for a fifth and final day, government prosecutors introduced more than 100 exhibits designed to further their case. Microsoft's day in court Chief among the new documents was evidence that Microsoft in the summer of 1997 threatened to stop making a Macintosh version of its popular Office software suite unless then-beleaguered Apple agreed to ally itself with the software giant.

"Apple needed to ensure that Microsoft would continue to provide MS Office for Mac or we were dead," Apple's chief financial officer Fred Anderson told Barksdale. "They were threatening to abandon Mac. The trading card was making Internet Explorer the default browser."

Anderson's statements, recorded in notes he took during a telephone call, came after Barksdale had learned through media calls that his browser was being dropped from Apple's Macintosh platform. Barksdale said learning of the new partnership "irritated the stew out of me."

The decision was famously announced on August 6, 1997, when Apple cofounder Steve Jobs and Microsoft CEO Bill Gates (appearing via satellite) told a jeering MacWorld trade show audience in Boston that Apple would utilize IE, and that Microsoft would invest $150 million in then-struggling Apple.

Barksdale tried to reach Jobs but instead got a call back from Anderson, who did not tie the investment to Apple's decision to choose Microsoft's browser, Barksdale admitted under questioning from Microsoft attorney John Warden.

Also today, government prosecutors brought AOL into the fray, introducing testimony from senior vice president of business affairs David M. Colburn that aims to demonstrate that Microsoft effectively strong-armed AOL into using Internet Explorer.

Prosecutors further introduced an AOL email that discusses details of a June 21, 1995, meeting at the heart of the case. Among other things, the email claimed Microsoft threatened to "crush" Netscape if it didn't agree to a deal.

Microsoft had claimed yesterday that new evidence it obtained over the weekend shows that the meeting was in fact a "set-up" orchestrated by Netscape to persuade the Justice Department (DOJ) to sue the software giant. The government attempted to deflate Microsoft's arguments today by introducing the email, which was sent to an AOL manager one day following the meeting.

According the author, referred to in the email as "NaviSoft," Microsoft was seeking a seat on Netscape's board of directors. It also wanted Netscape to "disclose all plans to Microsoft," "renounce the network as a platform," and limit other companies' access to Netscape programming interfaces.

"In return, Netscape would be Microsoft's special partner, get inside information, etc.," the email explained. "If Netscape didn't do the deal, Microsoft would crush them. It was funny to listen to [Netscape's] Marc [Andreessen] take umbrage at 'arrogant 25-year-olds from the University of Washington,'" according to the email's author.

With Barksdale's testimony complete, AOL senior vice president David Colburn is set to testify for the government tomorrow. In his written testimony, Colburn said that "AOL would not have been willing to negotiate a browser license with Microsoft had Microsoft not indicated a willingness to bundle and to promote the AOL client software in some form with Windows."

The testimony, which provides new details about negotiations between the two companies, could support the government's contentions that Microsoft illegally leveraged its Windows monopoly in order to compete in the browser market.

A planned showing of videotaped testimony from Microsoft chairman and chief executive Bill Gates was postponed until Thursday at the earliest.

Today's session, the sixth day of trial, was attended briefly by former appellate judge Robert Bork, now a paid consultant for Netscape. For the first time, Iowa Attorney General Tom Miller attended, sitting at the plaintiffs' table in the front of the courtroom.

Barksdale also testified in detail about his company's efforts to get access to Microsoft APIs, or application programming interfaces, the code that software developers need in order to write programs for Windows. He said that after his company rebuffed Microsoft's proposal to divide the browser market, the software giant withheld two APIs Netscape needed to get its product out for the Christmas season.

"They have the ability, and I think the will, to stop a progressive, aggressive, hard-hitting team by not giving you some of these things, and that is a serious problem in our industry," Barksdale testified. "They were treating us one way and others another way."

But in a second round of cross-examination, Microsoft's Warden introduced an email from a Microsoft executive that disputed withholding the APIs and further accused Netscape of locking some of its customers out of access to some of its own interfaces.

"I'm suggesting it's the pot calling the kettle black, or that people who live in glass houses should not throw stones," Warden said. He also claimed that Netscape's attempts to get the APIs to write programs that would run on Windows 95 proved that it still planned to write a version of its Navigator browser for the platform, which was what Microsoft allegedly had told Netscape not to do.

Barksdale replied that the proposal was for Netscape to drop the Windows 95 version over time, not immediately.

Among other exhibits the government introduced today were depositions from Netscape cofounders Marc Andreessen and Jim Clark, as well as one of Microsoft's Chris Jones. Boies suggested that all three--including that of Jones--proved Microsoft in fact proposed splitting the browser market.

"Was there any discussion in the meeting with Netscape people that...Microsoft essentially would take the part of the business related to Windows 95 and Netscape could handle remaining parts?" a government attorney asked Jones in the deposition.

"Oh, I believe there was a discussion of that nature, yes," Jones replied.

Reuters contributed to this report.