USA versus Microsoft - the 13th week

Bill Gates' Microsoft is accused of anti-competitive acts

by independent computer industry analyst Graham Lea

Paul Maritz, Microsoft's group vice president for platforms and applications, was the first Microsoft employee to take the witness stand in Washington.

There was tough and relatively unproductive cross-examination by David Boies, the Department of Justice's special trial counsel. For his part, Mr Maritz was short on facts and long on explanations, and in many cases his replies did not correspond with the question asked.

His direct testimony, submitted in writing, appeared to have been produced by a team with much legal and marketing support.

Paul Maritz: short on facts

Judge Jackson has been taking a very lively interest in the proceedings throughout the week, asking at one stage if open source developers were hobbyists, and several times directly questioning the witness at length.

So far as the market share for Windows was concerned, Mr Maritz thought it was in the 70-80% range, and to considerable surprise, he put the piracy of Microsoft software in second place.

Microsoft has been maintaining that Internet Explorer is fully integrated with Windows 98, despite attempts to sever the connections, and allow increased competition possibilities for browsers from Netscape and the Norway-based Opera Software.

It transpired that Microsoft was considering adding speech processing to the operating system. Although Microsoft is many years behind Dragon and IBM with speech recognition software, it is likely to gain market share if it does add it to Windows providing the product is of high-enough quality.

Microsoft seemed to be very keen to establish that IE was being developed in early 1994, but as the evidence of emails was seen and the oral testimony was heard, it became increasingly clear that the wrong line of enquiry was being followed.
It was not so much when Microsoft started development that was of interest, but Microsoft's true reason for integrating IE with Windows.
Microsoft maintains it is a natural development, but the DoJ says it was an anti-competitive act aimed at Netscape. The DoJ produced a series of Microsoft emails that showed how IE was artificially "integrated" into Windows.

Mr Boies cross-examined Mr Maritz at length about his alleged remark that Microsoft would "cut off Netscape's air supply" by making IE free and effectively forcing Netscape to offer its Navigator browser free as well.
Mr Maritz was also accused of using the phrase "embrace and smother" for its relationship (parodying the official policy of "embrace and extend").

Mr Maritz admitted that in memory-constrained circumstances, applications run more slowly on Windows 98 than on Windows 95. Mr Maritz portrayed Linux as a significant competitor to Windows, but the most significant factor was that it was "cool", he said.

The history of relationships with Apple took some considerable court time.
It was confirmed that Microsoft had reached an undisclosed, out-of-court settlement with Apple over the appearance of some Apple QuickTime code in Microsoft's Video for Windows.
In fact Microsoft was in this case an innocent party, in that it had been given the code by Intel, who in turn had obtained it from the San Francisco Canyon Company, a contractor to Apple and Intel.

Microsoft also disclosed that Apple was claiming $1.225bn for patent licensing, but this was settled after Apple CEO Gil Amelio left and Steve Jobs took over again.

Microsoft also made an investment in Apple, and to the considerable disappointment of some Apple stalwarts, IE became Apple's default browser.

The Wintel relationship went through a chilly period in 1995 when Microsoft wanted Intel to stop writing software, (so slowing the introduction of 32-bit Windows); to favour its Internet Explorer browser; and to stop supporting Java multimedia.

For its part, Intel wanted support for its MMX technology and for Microsoft not to collaborate with AMD, a rival microprocessor developer. In the event, Microsoft did support the extra instructions requested by AMD to make games run faster, which Microsoft says shows its independence from Intel.

The product Microsoft seemed to respect was Lotus Notes, for which Microsoft has no direct competitor. Mr Maritz used this as an example of how a product developed initially by some 30 programmers at Iris Associates could become worth around $3bn when it was acquired by IBM.

A fierce legal argument developed during the week about the production of some documents by Microsoft bearing on the testing of Professor Felten's prototype program to remove browser functionality from Windows 98, which Microsoft had said was impossible. Judge Jackson ordered Microsoft to surrender the documents.

This week the Microsoft witness is Jim Allchin.

---

Graham Lea is a leading computer industry analyst specialising in Microsoft and who will be following the case for News Online - his views do not represent those of the BBC.