Microsoft Antitrust Case Submitted With No Clear Winner >By William Fellows

Computergram International, Sept 22, 1999

No knockout blows were delivered by government or Microsoft Corp attorneys during closing arguments of the antitrust trial in Washington DC yesterday. Declaring simply "the case is submitted," Judge Thomas Penfield Jackson strode out of the ceremonial courtroom past the statue of Moses, which overlooks the bench, at 5.15pm to begin his deliberation on the 11-month- old trial. The case was brought against Microsoft Corp by the US Department of Justice and 19 states alleging actions that Microsoft employed to maintain its market share with Windows are illegal and that the company used the power of its monopoly share to try to dominate the internet browser market, and in the process restrained trade and harmed consumers.

George Washington University antitrust expert Professor William Kovacic told ComputerWire that he didn't believe either side had materially improved on their arguments during the day. Many observers noted that the judge did not use the opportunity to question each side more closely on the merit of its case as often happens during the closing arguments of such trials.

Like a boxer wearing down his opponent by making him shoot the punches, lead attorney David Boies closed the government's case by drawing from material contained exclusively in Microsoft's own internal documents, a clever move to circumvent many of the Redmond-based company's arguments.

Throughout, Microsoft has appeared to be fighting a rearguard action, knocked down on more than one occasion when witnesses were shown to have contradicted themselves and then again when evidence was embarrassingly shown to have been a reconstruction of purportedly live events. But lead attorney John Warden fought a smart final round. Final, that is, unless the case goes to appeal. In a flurry of counter arguments he sought to cast ambiguity over all of the government's charges, in the full knowledge that in law, ambiguity gives the defendant the benefit of the doubt.

The government is trying to prove that Microsoft has a monopoly of the US market, that it attempted to monopolize the browser market, and that it practiced an unreasonable restraint of trade under sections one and two of the Sherman antitrust act. Lead attorney David Boies said: "This case is about the real world. It's not about legal and economic arguments. It's about common sense and facts." Boies revisited internal Microsoft emails and other documents in a bid to show that Microsoft controls between 90% and 95% of the PC operating systems market. They also imply that the only real competition comes from pirated copies of Windows itself. Microsoft customers including Hewlett-Packard, Packard-Bell and Compaq Computer recognize in the evidence that they have no viable alternative to Windows and Microsoft's own executives stated Windows is "the only game in town." Boies claimed that Professor Fisher's evidence for the plaintiffs showed clearly that Netscape and Java are not operating systems and therefore not competition to Windows.

The government said that "powerful" proof of monopoly power is also evident in Microsoft's ability not to care about anyone else's pricing. In fact it raised Windows 95 prices when Windows 98 was released: "That's not usual," said Boies. Boies came back time and again to the "fateful" meeting Microsoft held with Netscape executives on June 21, 1995 during which it unsuccessfully tried to carve up the browser market by offering Netscape equity, other deals and freedom to operate in the 16-bit and Macintosh markets. In return it wanted Netscape to concede to it the 32-bit Windows browser. Netscape rejected the deal. Microsoft attorney John Warden argued some of the Netscape notes pertaining to this meeting were "created" to buoy the government's complaint.

In an attempt to quash Netscape and the ability of other companies to create cross-platform applications, including Java, which do not depend on Windows, Boies argued that Microsoft artificially and illegally tied its Internet Explorer browser to Windows, thereby restricting consumer choice and making it more difficult for newcomers to enter the market. It even held back the Memphis follow-on to Windows 95 until 1998 so IE could be integrated into it. "I agree with the syncing plan," said Microsoft SVP Jim Allchin, "it's the only thing that makes sense even if OEMs suffer." Boies said "nowhere does Microsoft say it will make a profit on the browser because it didn't make it to do it. It's a non-revenue product, marketed at a loss to stymie incipient competition."

The government used Jim Barksdale's testimony to argue that technology is two years behind where it should be because of Microsoft's actions. "The most pernicious conduct, said Boies "is that companies won't invest in products Microsoft may see as threatening." Boies recalled the testimony of OEM witnesses including Symantec Corp, which said it was pressurized to make Microsoft Java and IE its defaults. Microsoft "is very vigilant in protecting its monopoly power and has no limits when trying to eliminate the competition."