By David Segal
Washington Post Staff Writer
Saturday, October 31, 1998; Page G01

An Apple Computer Inc. executive has told a federal judge that Microsoft Corp. used its market power to pressure Apple to promote Microsoft products and abandon competing products. The pressure continued, he said, even after government lawyers filed their antitrust lawsuit against the software giant.

"Microsoft does not hesitate to use its operating system monopoly power and application program dominance to try to eliminate competition, acquire control of new markets and block innovation that could challenge its position," Avadis Tevanian, an Apple senior vice president, said in written testimony submitted to U.S. District Judge Thomas Penfield Jackson in Washington.

Tevanian's testimony was released yesterday as the non-jury trial of the Justice Department's antitrust case against Microsoft shifts its focus to the company's relations with Apple. The government hopes to prove that strong-arm tactics it says Microsoft used against Netscape Communications Corp. were also employed against other companies.

In a written response issued to the media yesterday, Microsoft officials contended that Tevanian misrepresented key facts about dealings with Apple executives. And far from trying to hobble Apple, Microsoft suggested that it was one of the company's most crucial allies.

"Microsoft competes with Apple to make Windows the innovative platform of choice, but we also cooperate in many ways to ensure that our respective tools and applications interoperate for the benefit of consumers," the company wrote in a news release.

Tevanian described a series of meetings in the spring of 1997 in which Microsoft executives succeeded in pressuring Apple to adopt Microsoft's Internet Explorer as the standard browser on a new version of Apple's operating system, Mac OS.

According to Tevanian, a team of Microsoft negotiators told Apple in mid-May that if the browser issue wasn't resolved to Microsoft's satisfaction, Microsoft would no longer support Microsoft Office for Mac -- a widely used software package that is critical to Apple's bottom line because it makes Macintosh computers more attractive to buyers.

Faced with that threat, Tevanian wrote, Apple reluctantly agreed in August 1997 to include Internet Explorer with all new Macintosh computers for five years. In return, Microsoft agreed to continue to support for Office for Mac.

The financial consequences of declining the deal, Tevanian stated, would have been "devastating."

In their response, Microsoft officials countered that Apple made Explorer its browser in large part because the product's technology had surpassed that of Netscape's.

Further, the company said, Microsoft was actually a key friend of Apple's at the time, even though Apple was then attacking it in a series of "groundless" patent disputes. And it was Microsoft's $150 million investment in Apple in August 1997, the company added, which restored consumer confidence in Apple and helped spur its turnaround.

Tevanian also detailed allegations that Microsoft embarked on a campaign to force Apple to cede the market for Windows multimedia playback software to Microsoft -- a campaign that extended until mid-June of this year, he said, a month after the Justice Department filed suit against the company.

According to Tevanian, Apple's popular QuickTime software -- which allows computer users to download and play video files -- posed a threat to Microsoft. In an effort to promote its own product, Tevanian said, Microsoft met with Apple executives and proposed that Microsoft would get the enormous Windows-related market and Apple would get the far smaller market for tools used in multimedia content.

When Apple declined the offer, Tevanian said, "Microsoft's response conveyed a simple message: Microsoft would drive Apple out of the multimedia business."

Microsoft then took steps to ensure that QuickTime would not run reliably under Windows, Tevanian said. He added that Microsoft pressured Compaq Computer Corp. and other PC manufacturers to refuse to deal with QuickTime.

Microsoft officials denied that they attempted to force Apple to leave the multimedia market or had issued threats to computer makers on the topic. And they said that any compatibility problems with QuickTime were the results of mistakes made by Apple's own software writers.

"Those kinds of discussions go on in the software industry every day, and in this case the companies decided to continue offering their own separate multimedia formats and media players and take their respective technologies in different directions," Microsoft said.