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  Microsoft's Final Witness Cites Consumer Benefits

By David Segal
Washington Post Staff Writer
Tuesday, June 22, 1999; Page E2

Firing its final shots in a six-month antitrust trial, Microsoft Corp. called as a witness yesterday an economist who argued that the company's foray into the browser market has brought consumers greater choice and better products at lower prices.

During a day of friendly questioning by a Microsoft attorney, Richard Schmalensee methodically attempted to poke holes in several of the government's key allegations against Microsoft, chief among them that consumers have been the biggest losers in the company's browser war against Netscape Communications.

But Judge Thomas Penfield Jackson, who is presiding in the case, repeatedly challenged Schmalensee, particularly when the Massachusetts Institute of Technology professor suggested that Microsoft had competed fairly and should not be considered a corporate predator simply because top officials at the company had stated in now notorious e-mails that they intended to crush Netscape.

"Most economists would not attach high importance to intent," Schmalensee said.

"That's what courts do every day," Jackson countered, hinting that the intentions of Microsoft employees might figure prominently in his final decision in the case.

Schmalensee is the last witness, and Microsoft is clearly hoping he can help the company end the trial not with a whimper or a bang but with a highly academic point-by-point rebuttal of the government's allegations. Schmalensee is expected to return today for another full day of direct testimony, and the trial is likely to wrap up this week.

The judge tried to inject some levity into the proceedings by starting the day by reading a fictional consumer complaint to a software company. The customer has upgraded a program called Girlfriend 1.0 to Wife 1.0 and is having trouble running programs such as Poker Night 10.3 and Beer Bash 2.1.

"This is a very common problem," Jackson said, reading the response by the fictional company and winning laughs in the courtroom. "Wife 1.0 is an operating system and designed by its creator to run everything."

Last year, the Justice Department charged the Redmond, Wash., company with illegally exploiting its monopoly in the computer operating system. Lawyers for the government yesterday dismissed Schmalensee's analysis and many of his numbers, countering that Microsoft intended all along to use its Internet browser to shore up its operating system monopoly.

"Every full moon they bring out this consumer-choice stuff," said David Boies, the lead trial attorney in the case. "They've charged higher prices in the only component of the PC market that is increasing in price, they've deprived consumers of choice, and they've forced computer makers to offer a product they don't want to offer."

© 1999 The Washington Post Company

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