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  Microsoft Executive Denies Allegations

By Rajiv Chandrasekaran
Washington Post Staff Writer
Saturday, January 23, 1999; Page E2

The senior-most Microsoft Corp. executive scheduled to testify at the company's antitrust trial has flatly denied government allegations that the software giant made anti-competitive threats to withhold crucial technology from three of the best-known firms in the computer industry.

In written testimony released yesterday, group Vice President Paul Maritz also denied he ever said that Microsoft wanted to "cut off Netscape's air supply." The government alleges he made that statement at a meeting in reference to rival Netscape Communications Corp. and has portrayed the statement as symptomatic of anti-competitive tendencies at Microsoft.

Maritz, a computer scientist who reports directly to Microsoft Chairman Bill Gates, is responsible for most of Microsoft's software, including its Windows operating system. His testimony offered a detailed rebuttal to allegations that his company bullied Intel Corp., Apple Computer Inc. and Netscape.

The Justice Department and 19 states "have attempted to portray instances of routine interaction between companies in the computer industry, who inevitably must deal with one another, as something nefarious," wrote Maritz.

The government contends that the threats show that Microsoft has engaged in a pattern of illegal business practices designed to maintain the monopoly of its Windows operating system and extend that dominance into the market for Internet browsing software.

Many of the now-famous, tough-talking Microsoft electronic mail messages brandished by government lawyers to support their claims either were written by or sent to Maritz. The Justice Department's lead trial attorney, David Boies, will confront the Microsoft executive with several of those messages when he takes the witness stand on Monday.

The government contends that Maritz made the "air supply" statement during a meeting with Intel executives. But according to his testimony, "I never said, in the presence of Intel personnel or otherwise, that Microsoft would 'cut off Netscape's air supply,' or words to that effect," Maritz maintained.

Netscape's chief executive, James Barksdale, testified earlier in the trial that Microsoft set out to crush his company after he spurned an offer at a June 1995 meeting to illegally divide the market for Internet browsing software. But Maritz said that such an offer never was made.

"I never instructed any Microsoft personnel to seek a 'division of the market,' nor do I believe that any such proposal was ever made," said Maritz, who was the highest-ranking Microsoft executive to deal with Barksdale in the months before and after the meeting.

In the case of Intel, government lawyers contend that Microsoft executives threatened not to develop software for a new line of Intel microprocessors if Intel did not cease its work on an Internet-related software project. Microsoft, the government maintains, believed Intel's Internet technology could interfere with Microsoft's effort to dominate the market for browsing software.

Maritz acknowledged that the discussions over the issue were heated, but said that no illegal threats were made. "Consistent with the corporate culture of both companies, participants at these meetings often express their views with considerable conviction and intensity," he said. But he said that "neither Intel nor Microsoft can intimidate each other."

With Apple, the government argues that Microsoft threatened to stop developing a new version of its popular Office software suite for Apple's Macintosh computers -- a product that industry analysts say was critical to Apple's financial health -- if Apple did not promote Microsoft's Internet browsing software more prominently than Netscape's.

Maritz said in his testimony that the Apple's decision to distribute Internet Explorer and Microsoft's promise to make a new Macintosh edition of Office was a small component of a larger deal between the two firms to settle a patent dispute. "Distribution of Internet Explorer on new Apple Macintosh computers was a relatively minor part of the transaction," he said.

Maritz also maintained that Microsoft does not have a monopoly with Windows. He argued that rival technologies, including the Linux operating system and the Palm Pilot hand-held computing system, could quickly grow in popularity and supplant Windows.

"The high technology industry is littered with businesses that did not recognize and respond to emerging competitive threats from seemingly distant product categories, and failed miserably as a result," he said.

© Copyright 1999 The Washington Post

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