By Jonathan Collins in Washington Microsoft Corp yesterday used the Washington courtroom to accuse all its key competitors of colluding against it and, most seriously, of dividing up the software market with implicit non-competition agreements. Microsoft’s charges were made in the cross-questioning of government witness John Soyring, IBM Corp’s director of network- computing software services. […]
By Jonathan Collins in Washington
Microsoft Corp yesterday used the Washington courtroom to accuse all its key competitors of colluding against it and, most seriously, of dividing up the software market with implicit non-competition agreements. Microsoft’s charges were made in the cross-questioning of government witness John Soyring, IBM Corp’s director of network- computing software services. Microsoft lawyers argued that top executives from Sun, IBM, Netscape, Oracle and Novell had held several meetings in the past twelve months with the intention of winning against Microsoft. At one meeting between IBM and Sun, claimed the Microsoft defense, Sun told IBM that it would move into the middleware software market, an area where IBM derives significant earnings. It also presented details of talks between IBM, Sun and the Santa Cruz Operation to develop a converged roadmap for their competing versions of Unix. IBM has already testified that Sun is one of its strongest competitors. In further support of the claims, Microsoft lawyers produced an email from IBM to Sun that described the context of the earlier meeting. The whole context of the meeting is a closer joint working relationship to ensure we win against Microsoft, it read. Microsoft attorneys then produced the transcript of an email sent from John M Thompson, IBM’s head of software, to Scott McNealy, CEO of Sun Microsystems and Jim Barksdale, CEO of Netscape Communications Corp. The email set out details of a telephone call between Thompson and McNealy. In it, Thompson stressed that the companies needed to work together to neutralize the impact of some of Microsoft’s recent Java announcements. The Microsoft counsel also highlighted a call from Thompson seeking to bring other companies in to back the IBM/Sun/Netscape implementation of Java. We must engage other partners to bundle Navigator and/or Java compatible JVMs with their products. We should start with Oracle and Novell…I will call Eric Schmidt if you will call Larry Ellison to start the conversation. Perhaps Larry will help us with Apple, Thompson wrote. This, according to Microsoft lawyer Steve Holley, amounted to six of the largest software companies in the world colluding to exclude Microsoft. Soyring maintained that the talks were outside of his remit and experience and so he could not comment on any such emails or meetings. The counsel then asked if Soyring would agree that the six companies when combined in this way would dwarf Microsoft no matter how it was measured. Soyring agreed, but said: except in market capitalization. On the courthouse steps following the day’s session, a Microsoft spokesperson said the allegations had shown that the DoJ’s case was to the benefit of a few of Microsoft’s competitors in the industry, and not the market in general or to consumers.