By Jo Maitland in Washington and Jonathan Collins in New York In the closing minutes of its epic antitrust battle with the Justice Department, Microsoft Corp introduced new material that appeared to be manufactured for the purposes of the trial. In a desperate final bid to win over Judge Thomas Penfield Jackson, Microsoft produced a […]
By Jo Maitland in Washington and Jonathan Collins in New York
In the closing minutes of its epic antitrust battle with the Justice Department, Microsoft Corp introduced new material that appeared to be manufactured for the purposes of the trial. In a desperate final bid to win over Judge Thomas Penfield Jackson, Microsoft produced a document produced by its own cable TV network, MSNBC which reported that America Online Inc had just acquired Microworkz.com Inc for its internet device, iToaster, a product that does not require Windows and is therefore a threat to the Windows operating system. Microsoft has centered its case around what it perceives to be potential platform threats to Windows. After the trial, ComputerWire discovered AOL had not acquired this company at all. Microworkz president and CEO said: We have entered cross-marketing talks with AOL in line with previous cross-marketing deals that AOL has made with other companies. He added: AOL may want to be the exclusive ISP for the iToaster, but it has not acquired us. The iToaster, launched at PC Expo in New York two days ago, is a handheld internet appliance priced at $200. Microsoft claims AOL is about to develop it into an AOL PC. Responding to the AOL PC news by Microsoft, lead government attorney David Boies said outside the courtroom, This is a deliberate attempt to distract from the central issue at stake here which is the PC operating system. He added: The iToaster has nothing to do with Microsoft’s anti- competitive practices and its own witnesses have testified that these devices will not replace the PC.
Microsoft’s attempt at a closing punch followed the government’s effort to go out with a bang earlier in the day. Boies was able to unseal a Microsoft document on its response to the AOL/Netscape/Sun alliance which contained handwritten footnotes allegedly made by Microsoft CEO Bill Gates. The note states: AOL doesn’t have it in their genes to attack us in the platform space. The document was prepared by Microsoft in December last year in response to the AOL/Netscape and Sun alliance and is titled: Competitive Reviews – deal discussion framework. It was put under seal at the time because of the commercial sensitivity of the merger. However, with the permission of AOL’s counsel, who was present in court when the document was made public, the government was able to reveal its content.
Boies then tried to determine how significant Microsoft economic witness Richard Schmalensee thought the note on this document was, in reference to the trial, and whether or not it was inconsistent with his testimony. The economist insisted it was not. Would you agree that you are here in this courtroom, to represent Microsoft? asked Boies. To which Schmalensee replied, Is this just a blanket attack on my ethics? No I am not interested in your ethics I am just interested in your answers, said Boies to laughter from the courtroom. Schmalensee said he owed his client an accurate presentation of their case and he owed the court at the truth. I have not invested 30 years in a scholarly reputation to put it at risk, he said. Later Boies asked Schmalensee if he thought Microsoft’s first waver agreements with OEMs could be anti-competitive. When Boies seemed to tire of Schmalensee’s exhaustive ability to avoid answering his questions, the judge stepped in. Dean Schmalensee, assume for a moment that Microsoft is a monopoly, would these agreements be anti-competitive? To which Schmalensee replied: I don’t know your honor. Judge Jackson closed the trial until August 10, when both sides will present their proposed findings. It has been almost pure pleasure, he said, Let’s keep it that way.