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  Microsoft Attacks Credibility of Intel Exec

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Post reporter Rajiv Chandrasekaran is online today from 11 a.m. to noon discussing the Microsoft trial. You may submit questions now.

Documents & Testimony
  • Intel VP Steven McGeady's notes on Gates "DOJ" comments
  • Gates Deposition Video Second Release

    Court Updates Check back frequently for courthouse dispatches from Post reporter Rajiv Chandrasekaran and for all The Post's coverage.

  • By Rajiv Chandrasekaran
    Washington Post Staff Writer
    Friday, November 13, 1998; Page B1

    The Microsoft antitrust trial turned into a tense sparring match over the credibility of a witness from Intel Corp. yesterday, with a lawyer for Microsoft accusing the executive of concocting some of his most colorful testimony and the government producing several documents to support the witness's claims.

    On the witness stand was Steven McGeady, an Intel vice president called by the government. He testified earlier this week that Microsoft Corp. had threatened to withhold crucial technical support from Intel if the chipmaker did not stop developing software that would compete with Microsoft's products. He also made the dramatic allegation that a senior executive at Microsoft told him of an intent to "extinguish" rival Netscape Communications Corp. and to "cut off Netscape's air supply."

    As the day of thrusting and parrying began, Microsoft attorney Steven Holley unveiled several handwritten notes, electronic-mail messages and pretrial statements by other Intel executives that were intended to cast doubt on McGeady's claims and depict him as disaffected and having an ax to grind against Microsoft.

    Holley tried to paint McGeady as out of step with Intel's policies toward Microsoft at the time. Among his evidence: an e-mail message that McGeady sent to Intel's then-chief executive, Andrew S. Grove, saying that "Microsoft could be goaded into doing something really stupid and anti-competitive, finally enraging the apparently placi[d] antitrust police."

    McGeady did not concede Holley's points, instead offering tart rebuttals and protestations that the lawyer was misinterpreting the documents.

    In one exchange that was typical of Holley's cross-examination, the lawyer showed McGeady a copy of his handwritten notes from the meeting in which he contends a Microsoft executive said that the company intended to "extinguish" Netscape. "This is not what your notes say," Holley told McGeady. "You don't see the word 'extinguish' anywhere in your notes, do you?"

    "There is no danger I would have forgotten," retorted McGeady, who said he didn't need to write down the remark because it was sure to stick in his mind.

    "You didn't add them to your notes because you made them up later?" Holley shot back.

    "This is absolutely untrue, and I resent the implication," McGeady responded.

    Later, Holley suggested that McGeady had made up the quote about a plan to "cut off Netscape's air supply." McGeady vigorously denied that as well.

    The Justice Department and 20 states allege that Microsoft has used illegal tactics to crush competition in the software industry. McGeady was called to testify in an effort to show that the company has even bullied Intel, normally one of its closest collaborators. Microsoft denies wrongdoing, saying that its business practices merely reflect the intense competitive spirit of the computer industry.

    With McGeady's credibility hanging in the balance, Justice Department lawyer David Boies set out to rehabilitate his image in the afternoon. On a large screen in the courtroom, he played several segments of a videotaped deposition by McGeady's boss, Ron Whittier. On the tape, Whittier said that he recalled the term "smother" being used to describe Microsoft's strategy at the meeting in question.

    "You certainly didn't ask Mr. Whittier to give that testimony or suggest that he make it up, did you?" Boies asked McGeady, who responded with a simple "No."

    For the next hour, Boies took the same approach with numerous allegations Microsoft raised in the morning. Instead of relying on documents and notes written by McGeady, which formed the basis for his testimony on Monday, Boies relied on e-mail messages and memos written by others at Intel.

    Microsoft has said that its opposition to Intel's software project grew from the fact that the programming was of "poor quality." To rebut that, Boies played a portion of the videotaped deposition of Intel executive Robert Sullivan in which he said the chipmaker decided not to release a software product to which Microsoft had objected because "our core business is based on, you know, to a large degree, continued cooperation with Microsoft" and Intel did not want to "try to go forward and face the consequences."

    Most of the alleged threats McGeady described occurred in 1995, when he directed a large multimedia software group at Intel Architecture Labs. Later that year, however, McGeady took a leave of absence to study at Massachusetts Institute of Technology.

    Holley suggested that McGeady's sabbatical was a result of his attitude toward Microsoft and "irresolvable disagreements" with his superiors. The lawyer introduced a copy of McGeady's notes of a meeting he had had with a senior Intel executive, Frank Gill. In the notes, McGeady wrote that Gill complained about his group's "belligerence toward Microsoft" and that Gill referred to him as a "prima donna."

    Microsoft's lawyer suggested that the Intel official's sabbatical was a result of "irresolvable disagreements" with his superiors.

    McGeady said one reason he took a sabbatical was that Microsoft had asked that he not be part of certain programs between the firms, making it hard for him to continue. "It is incumbent for us at Intel to work with Microsoft," he said.

    "You believed you had been axed by Mr. Gates and Mr. Maritz, didn't you?" Holley asked McGeady, referring to Microsoft Chairman Bill Gates and Senior Vice President Paul Maritz.

    Holley also accused McGeady of sharing with Netscape information about Microsoft's Internet strategy. The lawyer displayed an October 1995 e-mail that McGeady sent to Netscape Chairman James Clark saying: "I would be happy to (confidentially) share with you my various experiences with 'your number one competitor' within the bounds of propriety."

    During the lunch break, a Microsoft spokesman called McGeady a "lone wolf" within Intel. At the end of the day, the federal judge presiding over the nonjury trial, Thomas Penfield Jackson, cut to the chase, asking McGeady whether he was appearing as a "spokesman" for Intel. Publicly, Intel officials have said they remain "neutral" in the antitrust case.

    McGeady said he believed he was "representing our corporate policy and strategy" during 1995, when the alleged threats were made.

    "You are here with the blessing of your CEO?" Jackson asked.

    "'Blessing' is a strong word," McGeady responded. He said company officials don't want to elaborate because "it is important to Intel to maintain a positive working relationship with Microsoft. My appearance here obviously creates a problem there."

    © Copyright 1998 The Washington Post Company

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