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Since Oct. 1998, the public has been permitted a rare look into the inner workings of software giant Microsoft. During this period the Federal Government prosecutors have been putting on their case against Microsoft - and its leader, Bill Gates.
Frankly I'm amazed, this may be one of the Top 10 legal cases in the 20th Century, and the public knows hardly anything about it! Maybe if this case involved thongs, DNA samples, and blue dresses, it would get some more coverage from the media!...
U.S. Anti-trust law has pretty much been settled as far as manufacturing & retail companies were concerned since the 60s. This is the first real test of anti-trust provisions in the Information Age. And, the outcome of this case, may very well set the tone of corporate behavior for the next 100 years in this country.
IMO, Bill Gates didn't set out to violate a whole bunch of Federal laws, he was just trying to keep his company on top of the technology industry. Unfortunately, some of the things he's done to try and maintain Microsoft's position as King of the Hill, violate the anti-trust laws - as we currently know them.
So now Microsoft's position is - those laws were OK for metal benders, but have no applicability in the Information Age. Maybe they're right, who knows?
Again in my opinion, one of Gates' biggest problems is that he is still, relatively speaking, a kid. He thinks that business is like a basketball game - figure out your opponent's weakness, build your team's strategy around that, and crush your opponent in any way possible. That doesn't work in the real world.
It's one thing to compete and beat another company on the merits of your products. It's something else to go to all of the PC manufacturers and tell them, "If you want the right to include Windows on your PCs (and who doesn't) you must NOT include Netscape and MUST include Internet Explorer." That kind of strategy has effectively taken away the entire market for Netscape's products - and gives rise to a violation of the anti-trust laws, as we know them.
Washington DC - The latest news in the Microsoft case is no news. The Supreme Court recently put out its next calendar and there was nothing scheduled on the pending motions of DOJ and Microsoft.
As you may recall, Microsoft had filed an appeal with the Court of Appeals for the DC Circuit after the ruling in the trial court finding that it had violated anti-trust laws and ordering a breakup of the company. Based upon past experience, Microsoft feels that it has a better chance in the intermediate appellate courts than it will in the Supreme Court.
The Department of Justice, on the other hand, does not want to let this matter drag on for years. If Judge Penfield Jackson's ruling is going to be supported, or overturned, DOJ wants to know now, so that it can act accordingly. There is also a feeling that DOJ will do better with the Supreme Court than it will in the appellate court.
So now the stage is set. Will the Supreme Court take jurisdiction of the case, thereby eliminating the intermediate appeal at the Court of Appeals for the DC Circuit, or will it refer it back to the normal legal channel? There are strong arguments both ways. My personal opinion is that the Supreme Court will decide that this case is too important to the country to spend years wandering through the appellate courts, and will take jurisdiction.
6/ /00 Washington DC - For many people the unthinkable (including, apparently, Bill Gates) happened and today Judge Thomas Penfield Jackson issued the ruling to break-up Microsoft into two separate companies for its violation of the Sherman Act. The ruling will split Microsoft into an operating system company and an application company.
In its final filing, Microsoft had expressed surprise at the the Court's intended course of action and requested further hearings, etc. before a final order was entered. Judge Jackson refused saying, "Microsoft's profession of surprise is not credible.(1) From the inception of this case Microsoft knew, from well-established Supreme Court precedents dating from the beginning of the last century, that a mandated divestiture was a possibility, if not a probability, in the event of an adverse result at trial. At the conclusion of the trial the Court's Findings of Fact gave clear warning to Microsoft that the result would likely be adverse, yet the Court delayed entry of its Conclusions of Law for five months, and enlisted the services of a distinguished mediator, to assist Microsoft and the plaintiffs in reaching agreement on a remedy of some description that Microsoft knew was inevitable. Even assuming that Microsoft negotiated in utmost good faith in the course of mediation, it had to have in contemplation the prospect that, were mediation to fail, the prevailing plaintiffs would propose to the Court a remedy most to their liking and least likely to be acceptable to Microsoft. Its failure to anticipate and to prepare to meet such an eventuality gives no reason to afford it an opportunity to do so now." To read the full text of this Order and the related Judgement see Microsoft Legal Papers
So now comes the Kibuki Dance that inevitably follows such a decsion. DOJ will praise the Judge for his thoroughness, fairness and courage, while Microsoft will criticize him for being biased, arbitrary and dumb. Given Microsoft's past success in the Appellate Courts it will try and keep the case at that level. DOJ, OTOH, will try to get the case before the Supreme Court as soon as possible. And subsequent to this being written, the Judge certified the case for an expedited appeal to the Supreme Court. We now must wait and see whether or not the Supreme Court will grant the expedited hearing to this case.
Looking back with 20/20 hindsite, I was right about the breakup and wrong about the number of companies that Microsoft would be broken into. As to future predictions - I think the Supreme Court will grant an expedited hearing, with oral arguments to be heard early next Spring. The really interesting item is whether the Court will enforce a code of conduct on Microsoft prior to the hearings. At this point I think it's about a 50/50 chance.
In the meantime, for either users or investors of Microsoft, I wouldn't be very worried. What everyone seems to forget is that Microsoft is much more than Bill Gates. In fact, while Gates has built his reputation as being an innovator (which is certainly debatable), what he has done exceptionally well is to build a world-class management team and workforce - and he rarely gets credit for that.
Even if you assume that Bill Gates will be totally consumed by the legal matters and provide no direction to Microsoft for the next couple of years (a VERY BIG assumption), Microsoft's world-class management team and workforce will continue to innovate, develop and roll-out new products and technology. If you look at what happened to the Baby Bells after the breakup of AT&T, this could be the best thing that ever happened to the users and investors of Microsoft.
4/3/00 NEW YORK (CNNfn) - In a stinging rebuke, a federal judge Monday ruled Microsoft Corp. violated the nation's antitrust laws by using its monopoly power in personal computer operating systems to stifle competition.
U.S. District Judge Thomas Penfield Jackson said the company "maintained its monopoly power by anticompetitive means and attempted to monopolize the Web browser market," which violates the Sherman Act. Microsoft also violated the Sherman Act by "unlawfully tying its Web browser to its operating system," the judge wrote.
The decision, while expected, was a setback for Microsoft, which had hoped to reach an out-of-court settlement with the government. However, when those talks broke down over the weekend, Judge Jackson decided to release his so-called "conclusions of law."
U.S. Attorney General Janet Reno praised the decision. "We are pleased that the court agreed with the department that Microsoft abused its monopoly power, that it violated the antitrust laws, and that it harmed consumers," Reno said. "Microsoft has been held accountable for its illegal conduct by a court of law."
Microsoft officials vowed to appeal the decision. "While we did everything we could to settle this case, and will continue to look for new opportunities to resolve it without further litigation, we believe we have a strong case on appeal," Microsoft Chairman Bill Gates said in a statement. "The Appeals Court already has affirmed Microsoft's right to build Internet capabilities into the Windows operating system to benefit consumers."
Now that Jackson has handed down his verdict, the case moves into the remedy phase, during which he is expected to hear more testimony in order to decide what action should be taken against Microsoft to prevent it from abusing its monopoly power in the future.
Click here to read complete Court Decision
On Mar. 2, 2000, the final papers were received in the Microsoft case, and the trial portion of this matter came to a close. Now, everyone awaits Judge Thomas Penfield Jackson's decision. Based upon the Judge's earlier rulings and preliminary finding of facts, it would seem that he will rule against Microsoft. The Washington pundits are now openly discussing the unthinkable - the breakup of Microsoft.
Perhaps in an effort to keep that from happening, Bill Gates has resigned as head of Microsoft, replaced by Steve Balman. Microsoft also has a new CFO. IMO however, this is too little, too late. At the risk of being proved wrong (one can never logically predict how a judge will act) I think Microsoft will be broken (eventually, after all the appeals) into several pieces. Most likely, they would be -
No one seems to know when Judge Jackson will hand down his opinion in this case. The verdict seems clear - guilty, based upon the preliminary findings. The real question here is what the remedy will be. Will the Judge proscribe Microsoft from certain conduct, and then appoint an overseer to assure that the company complies? Will he slap MS on the wrist with a fine? Or will he lower the boom as the Courts last did with AT&T, and break the company up into various entities?
Whatever the ruling, the injured party(ies) will raise a hue and cry. So as airline pilots in the Northeast corridor are prone to saying in Winter, "Will the stewardesses please take their seats and remain there for the duration of the flight. We're going to incur a little turbulence on the way in...."
On Nov. 5, 1999, Judge Thomas Penfield Jackson issued a 206 page document in the Microsoft case, containing his preliminary findings of fact. Although judges create findings of fact, and then apply the applicable law to these facts, this normally occurs simultaneously in the published opinion of the case.
Judge Jackson's finding of facts can only be viewed as devastating to Microsoft. In effect, he found in favor of the DOJ on virtually all of its counts against Microsoft. Some of the findings are listed below:
So what does this all mean? For consumers in the short term, nothing will change. Regardless of the final ruling that Judge Jackson makes, the losing side (or perhaps both sides) will appeal the case. If normal procedure is followed, it will take a minimum of three years for the appeals to work their way to the Supreme Court - and there can't be any doubt that's where this case is heading.
There is a procedure that would permit the parties to bypass the Appellate Court and go directly to the Supreme Court, but it's rarely used, and even then, the Supreme Court which is very jealous of its calendar, might send the case back to the trial court.
My personal opinion is that Judge Jackson, in issuing a preliminary finding of facts, was trying to send a message to Microsoft to settle the case with DOJ. The unspoken threat to Bill Gates is that any deal you can cut with DOJ would be better than what you'll get from this Court. Unfortunately, Gates' press conference immediately after the findings were issue didn't sound like he was ready or capable to acknowledge that he was wrong and willing to change his ways.
In the beginning of this case, most legal/industry commentators stated that the likelihood of Microsoft being broke apart was slim to none. Based upon Judge Jackson's findings of fact, I think it is now a near 50/50 possibility. Otherwise the Court would be supervising Microsoft's activities for many years to come - and that is something the courts are loath to do.
However, even if it came to pass that Microsoft was broken up, I don't think this is a bad thing for either the industry or the Microsoft investors. If you look at the result of the breaking up of AT&T, a fair observer would have to find that it was a positive step for both the investors as well as the public at large.
The other concern that the TV commentators have been kicking around is that if Bill Gates keeps fighting this matter that Microsoft will suffer. Frankly, I don't think that argument holds water. Microsoft is more than Bill Gates. In fact, one could argue that Bill Gates biggest strength is not in software development, but in creating an environment where the best and brightest are attracted and encouraged to grow. Microsoft has a substantial cadre of innovative, dynamic senior managers. Even is Bill Gates were to devote full time (highly unlikely) to defending the case for the next few years, the existing management team would continue to grow the company.
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For those of you who are unfamiliar with U.S. policy on trade, the following may be helpful - otherwise you may want to skip to the economic analysis of the case, or the news from the trial itself. As a matter of federal policy Congress has enacted various statutes (Robinson-Patman Act and Sherman Anti-trust Act) to prevent individuals or corporations from acquiring monopoly power and using it to the detriment of the public.
The statement of general policy is a lot easier to state than it is to enforce. The reason is that business behavior is rarely, if ever, binary. Rather business behavior covers an entire spectrum from completely free markets to absolute monopoly. The extremes are easy to identify - it's the point where otherwise legal business activity crosses over into a restraint of trade that causes problems.
See also - http://users.ju.edu/~sjeante/Microsoft/antitrust.html
For instance, it is NOT a violation of the antitrust statutes for a company to enter into an exclusive dealing contract with a customer. The problem arises when that company enters into enough of these contracts that it has effectively taken away the marketplace from its competitors.
It is also common in today's business environment for a company to tell a customer that if the customer will buy so much of product A, then it will give a price discount (or some other incentive) on product B. But when that same company tells its customer if you don't buy product A, then I won't sell you any product B - that an anti-trust violation has occurred.
Thus you have Section 1 of the Sherman Anti-trust Act which states:
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
In it's case against Microsoft, the Department of Justice ("DOJ") has alleged that Microsoft has used its market power in restraint of trade to the detriment of the public generally and certain of Microsoft's competitors in particular.
Specifically, DOJ alleges that Microsoft has:
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The following is the Government's economic analysis of the Personal Computer Industry:
There are high barriers to entry in the market for PC operating systems. One of the most important barriers to entry is the barrier created by the number of software applications that must run on an operating system in order to make the operating system attractive to end users. Because end users want a large number of applications available, because most applications today are written to run on Windows, and because it would be prohibitively difficult, time-consuming, and expensive to create an alternative operating system that would run the programs that run on Windows, a potential new operating system entrant faces a high barrier to successful entry.
Accordingly, the most significant potential threat to Microsoft's operating system monopoly is not from a direct, frontal assault by existing or new operating systems, but from new software products that may support, or themselves become, alternative "platforms" to which applications can be written, and which can be used in conjunction with multiple operating systems, including but not limited to Windows.
To protect its valuable Windows marketshare against such potential competitive threats, and to extend its operating system monopoly into other software markets, Microsoft has engaged in a series of anticompetitive activities. Microsoft's conduct includes:
One important current source of potential competition for Microsoft's Windows operating system monopoly comes from the Internet, described by Microsoft's CEO, Bill Gates, in May 1995 as "the most important single development to come along since the IBM PC was introduced in 1981." As Mr. Gates recognized, the development of competing Internet browsers -- specialized software programs that allow PC users to locate, access, display, and manipulate content and applications located on the Internet's World Wide Web ("the web") -- posed a serious potential threat to Microsoft's Windows operating system monopoly.
Internet browsers pose a competitive threat to Microsoft's operating system monopoly in two basic ways. First, if application programs could be written to run on multiple operating systems, competition in the market for operating systems could be revitalized. The combination of browser technology and a new programming language known as "Java" hold out this promise. Java is designed in part to permit applications written in it to be run on different operating systems. As such, it threatens to reduce or eliminate one of the key barriers to entry protecting Microsoft's operating system monopoly.
Second, Microsoft recognized that Netscape's browser was itself a "platform" to which many applications were being written -- and to which (if it thrived) more and more applications would be written. Since Netscape's browser could be run on any PC operating system, the success of this alternative platform also threatened to reduce or eliminate a key barrier protecting Microsoft's operating system monopoly.
To respond to the competitive threat posed by Netscape's browser, Microsoft embarked on an extensive campaign to market and distribute Microsoft's own Internet browser, which it named "Internet Explorer" or "IE." Microsoft executives have described this campaign as a "jihad" to win the "browser war."
Competition on the merits between Netscape's Navigator and Microsoft's Internet Explorer would have resulted in greater innovation and the development of better products at lower prices. Moreover, the offsetting advantages of Microsoft's size and dominant position in desktop software and Netscape's position as the browser innovator and the leading browser supplier, and the benefit to consumers of product differentiation, could have been expected to sustain competition on the merits between these companies, and perhaps others that have entered and might enter the browser market.
Initially, Microsoft attempted to eliminate competition from Netscape by seeking an express horizontal agreement not to compete. In May 1995, Microsoft executives met with top Netscape personnel in an attempt to induce Netscape not to compete with Microsoft and to divide the browser market, with Microsoft becoming the sole supplier of browsers for use with Windows 95 and successor operating systems and with Netscape becoming the sole supplier of browsers for operating systems other than Windows 95 or its successors. Netscape refused to participate.
Having failed to negotiate a situation acceptable to it, Microsoft invested hundreds of millions of dollars to develop, test, and promote Internet Explorer, a product which it distributed without separate charge. As Paul Maritz, Microsoft's Group Vice President in charge of the Platforms Group, was quoted in the New York Times as telling industry executives: "We are going to cut off their air supply. Everything they're selling, we're going to give away for free." As reported in the Financial Times, Microsoft CEO Bill Gates likewise warned Netscape (and other potential Microsoft challengers) in June 1996: "Our business model works even if all Internet software is free. . . . We are still selling operating systems. What does Netscape's business model look like? Not very good."
Next, Microsoft required PC manufacturers, as a condition of obtaining licenses for the Windows 95 operating system, to agree to license, preinstall, and distribute Internet Explorer on every Windows PC such manufacturers shipped. By virtue of the monopoly position Windows enjoys, it was a commercial necessity for OEMs to preinstall Windows 95 -- and, as a result of Microsoft's illegal tie-in, Internet Explorer -- on virtually all of the PCs they sold. Microsoft thereby tied its Internet Explorer software to the Windows 95 version of its monopoly operating system and leveraged its operating system monopoly to require PC manufacturers to license and distribute Internet Explorer on every PC those OEMs shipped with Windows.
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The trial began in October, 1998. Microsoft had sought numerous delays in the start of the trial, but the courts would not permit this. The case began with the DOJ putting on its case. It quickly became clear that much of the proof against Microsoft was going to be in the form of 'smoking gun' memos from various senior managers at Microsoft, statements to the press by these individuals, and, of course, copies of email messages that probably shouldn't have been written.
JB Comment - I know a number of the attorneys (both in-house counsel and outside counsel) who represent Microsoft, and I'm sure these fine lawyers must have been cringing at the public statements issued by Bill Gates and others over what Microsoft was going to do to Netscape, Sun (over control of Java), Oracle (over the network computer), etc. Every time I read one of these remarks, only one word came to mind - hubris.
In the same way that John Gotti's remarks after each acquittal only served to further inspire federal prosecutors, the remarks by Gates, Maritz et al, must have been red flags to the attorneys in the Anti-trust Division. There have been many rumors that weak-kneed Bill and fainting Janet didn't want to bring this case. But, at a certain point, the folks in the Anti-trust Division just wouldn't take 'No' for an answer.
Early in the trial, Steven McGeady, an Intel Marketing VP, testified that he heard Microsoft executive Paul Maritz declare at a September 1995 meeting that the company's goal was to "embrace, extend and extinguish" the opposition.
McGeady also testified that Maritz said his company would "extinguish Netscape's air supply," meaning its income from the browser, by giving away the Microsoft browser.
Subsequently when Microsoft's attorney's were cross-examining McGeady, Judge Jackson became irritated. "What is the point of this?" Jackson asked during an exchange. "What are you trying to demonstrate? Are you just trying to embarrass him?"
In his testimony, Government expert Weadock said the fact that application code (the building blocks of software) may coexist with operating system code doesn't imply that the application can't be removed. "An operating-system vendor can mitigate at least some of the potential disadvantages of integration by providing customers the option of uninstalling the integrated application (or by offering non-integrated options to begin with)," Weadock said. "The commingling of application and operating system code does not preclude the developer of the product from providing customers the ability to remove a bundled application."
Microsoft has also contended that the Windows/IE bundle offers benefits to consumers. Weadock disputed that claim, however, pointing out that a separate application bundled into the operating system increases the likelihood that an application failure would affect the operating system because of the shared code.
Weadock also noted that bundling products also increases the likelihood of incompatibilities with other applications. Several companies, including Apple Computer Inc. (AAPL) and RealNetworks Inc. (RNWK) have complained that some of their products don't work properly under Windows
On Wednesday, 1/6/99, after a brief recess called to locate a copy of a Washington Post article, U.S. District Court Judge Thomas Penfield Jackson asked the government's chief economic witness to comment on AOL (NYSE:AOL) Chairman Steve Case's reported remarks that the newly merged company would not try to compete against Microsoft's operating system "monopoly."
"AOL's merger with Netscape has no bearing on the Microsoft case, as nothing we're doing is competitive with Windows," Case reportedly said. "We have no flight of fancy that we can dent in any way, shape or form what is a [Microsoft] monopoly in the operating system business."
Jackson turned to MIT professor and government witness Franklin Fisher. "Assuming these quotes are accurate, is this consistent with your understanding of the importance of this consortium insofar as competition is developing?" he asked.
"It certainly is," Fisher replied.
Both sides said the months of testimony and the thousands of documents submitted as evidence worked in their favor, despite sometimes critical questions of Microsoft witnesses by the judge in the case and the occasional embarrassing recanting of testimony in the past few weeks.
DoJ attorney David Boies asserted that the government made its case "out of the mouths of their own witnesses" and suggested that the judge may have a hard time finding Microsoft's witnesses to be credible.
Faced with criticism regarding the credibility of some Microsoft witnesses and the company itself as a result of government cross-examination in the case Microsoft's chief trial lawyer turned to a law adage. "When you have the law on your side, you try the law," John Warden said. "When you have the facts on your side, you try the facts. When you don't have the law or the facts on your side, you try credibility."
Robert Muglia, Microsoft's senior VP of the applications and tools group, who was the last witness before the recess began, faced cross-examination Friday afternoon on his testimony that Microsoft enhanced a version of the Java technology for the benefit of consumers because Java failed to deliver cross-platform performance.
Muglia was confronted by DoJ attorneys with an internal Microsoft document that said, "kill cross-platform Java by grow [sic] the polluted Java market" and explained in court that "polluted" referred to Java developer Sun Microsystems Inc.'s "pure" Java marketing program.
Government attorneys also used other internal Microsoft e-mails and documents referring to attempts to wrest control of Java from Sun, including an e-mail from Ben Slivka, a Microsoft executive, to Gates on April 14, 1997. Slivka listed a number of goals, including "how do we wrest control of Java away from Sun."
Yet another e-mail message, this one from Gates, prompted a testy exchange with U.S. District Court Judge Thomas Penfield Jackson. Gates wrote in the May 1997 memo, "I am hardcore about NOT supporting JDK1," referring to a Java Development Kit from Sun. Boies asked Muglia for his interpretation of what "hardcore" means.
Muglia started to explain that later in the letter Gates may have been more flexible on the subject, but Boies steered back to the original point, asking whether when Gates says he is "hardcore" about something he is taken seriously.
"We take Bill very seriously," Muglia said, trying again to explain what Gates might have meant, but Judge Jackson cut him off, saying, "I read it as him [Gates] saying he doesn't like the idea of supporting it," adding, "Let's not argue about it."
When Muglia persisted, Jackson turned to him and said, "No. Stop. There is no question pending."
Microsoft's business dealings with PC maker Gateway drew some sharp questions Thursday from Jackson after the government introduced a sworn written statement from a Gateway executive complaining of pressure and threats from Microsoft.
In a response to a DoJ demand for information, James von Holle, a Gateway executive, wrote in a statement that after Gateway began offering rival Netscape's Navigator, Microsoft representatives "repeatedly" told Gateway that "MS considers Gateway's offer of the competitive product a 'serious' issue that could 'affect our working relationship.'"
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Mar. 24, 1999
SAN FRANCISCO - Microsoft has submitted a proposal to the
U.S. Department of Justice and state attorneys general to settle antitrust
charges, but one official has described it as inadequate, according to a
published report Wednesday.
Dow Jones reported that Iowa Attorney General Tom Miller received the proposal and described it to a fellow attorney general as not going far enough. It is "far from what anyone in our group would expect to be adequate," Bill Lockyer, California attorney general, said Miller told him. Lockyer said he had not seen the proposal.
According to Dow Jones, Microsoft indicates in its proposal that it is willing to loosen its contracts with OEMs (original equipment manufacturers) and alter contracts with computer makers and Internet service providers to eliminate the portions that require exclusive or near-exclusive distribution of its products. The contracts have been at the heart of the case against the software giant, which was accused of using its monopoly in desktop software to gain dominance in the Internet market.
However, the report says, Microsoft's proposal avoids concessions on the issue of product integration, a second key point in the case. The government claims Microsoft's bundling of its Internet Explorer browser with its Windows operating system was anticompetitive.
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As if Microsoft didn't have enough problems -
NEW YORK (CNNfn) - A federal judge Tuesday (11/17/98) delivered a crushing blow to Microsoft Corp. by granting Sun Microsystems Inc.'s request for a temporary injunction to block shipments of Windows 98 that contain incompatible versions of Sun's Java programming language. Breaking news - the Federal Court of Appeals has reversed the District Court's ruling on th injunction stating that there was not 'irreversible harm' in Microsoft shipping Windows 98, and has directed the lower Court to dissolve the injunction.
U.S. District Court Judge Ronald Whyte gave Microsoft 90 days to modify its Windows 98 operating system and Internet Explorer 4.0 Web browser or pull them from the market. Current versions of the products are not affected by the ruling.
Specifically, Sun accused Microsoft of "polluting" Java for its own purposes, claiming Microsoft's version ran Java applications only under Windows. In May, Sun filed a request for an injunction in U.S. District Court in San Jose, Calif.
How this litigation will affect the anti-trust litigation, no one knows. But all things considered, this can't be a good omen for Microsoft.
Separately, a longstanding war between technology giants reemerged in Microsoft's antitrust trial Tuesday (11/17) as a government witness testified Microsoft's actions stifled IBM Corp.'s chances to compete in the computer operating system market.
John Soyring, IBM director of network computing services, said Microsoft's licensing terms with software developers makes it difficult for them to translate Windows applications to IBM's OS/2 operating system. Though IBM and many software reviewers considered OS/2 technically superior to Windows, the product has never been able to garner mass acceptance, in large part because software developers write applications only for Windows.
"Specifically, many of the agreements under which Microsoft licenses tools… to ISVs [independent software vendors] restrict use of the tools to developing for Windows. Thus, ISVs, who develop applications first for Windows because of its huge install base, may not be able to use the same tools to develop applications for OS/2."
November 20, 1998 WASHINGTON (AP) -- The judge in the Microsoft antitrust trial -- in a contentious, private meeting with lawyers -- criticized the software giant's chairman, Bill Gates, as being evasive during his sworn depositions last summer with government lawyers.
The meeting Thursday evening in the judge's chambers came after Microsoft's lawyer complained about the government playing many short videotaped excerpts -- rather than a single, long excerpt -- from the 20 hours that lawyers questioned Gates.
Microsoft's lawyer, John Warden, told U.S. District Judge Thomas Penfield Jackson that the government was using the video "for the purpose of an audience outside the courtroom and for the purpose of creating news stories day after day."
"If anything, I think the problem is with your witness, not with the way in which his testimony is being presented," U.S. District Judge Thomas Penfield Jackson told Warden. "I think it's evident to every spectator that, for whatever reasons, in many respects Mr. Gates has not been particularly responsive to his deposition interrogation," the judge said. "It's a difficult mix."
On Friday (11/20/98), in what can only be called a case of the pot calling the kettle black, Japan's Federal Trade Commission said Microsoft violated that country's anti-monopoly laws and ordered the Redmond, Washington-based company to stop engaging in unfair business practices.
The commission found that Microsoft and its Japanese subsidiary had bundled software pre-installed in personal computers in a way that put competitors at a disadvantage, the spokesman said.
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