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Microsoft Antitrust Trial Set to Resume

By Rajiv Chandrasekaran
Washington Post Staff Writer
Tuesday, June 1, 1999; Page D10

After a 13-week recess, lawyers for Microsoft Corp. and the government will head back into a Washington courtroom this morning to present rebuttal arguments in the antitrust lawsuit against the software giant.

The company will argue that it does not have a monopoly with its Windows operating system software because it faces competition from a host of emerging technologies. The government will maintain that the new technologies will not significantly dent the dominance of Windows into the foreseeable future, and that such threats do not justify the firm's alleged bullying of competitors in the computer industry over the past decade.

Although both sides held one face-to-face meeting in March aimed at trying to settle the case, there have been no further discussions, and sources on both sides have said they remain far apart on key issues.

Some legal experts believe Microsoft's rebuttal strategy may be designed with an eye toward a possible later stage in the proceedings -- what sanctions to impose if U.S. District Judge Thomas Penfield Jackson rules against the company. Demonstrating competition from new technologies, the legal specialists say, may not shield the company from liability for alleged anti-competitive acts in the past, but it may lead Jackson to mute whatever sanctions he might impose.

Each side is allowed to call three rebuttal witnesses. The government has said it will summon two experts who testified earlier: Franklin M. Fisher, a Massachusetts Institute of Technology economist; and Edward Felten, a Princeton University computer scientist. The government's star rebuttal witness will be Garry Norris, an International Business Machines Corp. executive who will allege that Microsoft charged IBM more than other personal computer manufacturers for Windows because IBM was selling a rival operating system called OS/2.

The government hopes Norris's testimony will show how Microsoft has used its market clout with Windows, which runs on 90 percent of the world's new personal computers, to crush competition in the computer industry. Fisher is scheduled to take the witness stand today. He will be followed by Felten and Norris next week.

One of Fisher's key tasks will be to recast a comment he made earlier in the trial about whether consumers had been hurt by Microsoft's actions -- a prerequisite for an antitrust violation. Asked whether there was any present-day harm to consumers as a result of Microsoft's business practices, Fisher said: "On balance, I'd think that the answer is no, up to this point."

Microsoft, too, will summon its economic expert who testified earlier in the trial: Richard Schmalensee, the dean of the Sloan School of Management at MIT. The company also will call Gordon Eubanks, the former chief executive of Symantec Inc., which has worked closely with Microsoft to make utility programs that work with Windows.

Microsoft's third witness will be David Colburn, an America Online Inc. executive who testified for the government. Colburn, who will be treated as a "hostile witness" by Microsoft, will be grilled about AOL's recent $10 billion acquisition of Netscape Communications Corp. Microsoft contends that the deal reshapes the competitive landscape of the technology industry and undermines key elements of the government's antitrust case.

Specifically, Microsoft points to AOL's plans to promote Netscape's Internet browser and develop AOL software that will run on electronic devices other than personal computers.

Copyright 1999 The Washington Post Company

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