Peter Kaplan
WASHINGTON: Internet video and audio pioneer RealNetworks Inc. accused
Microsoft Corp. in court on Wednesday of seeking to restrict its products
because they posed a threat to the software giant's Windows operating system
monopoly.
RealNetworks vice president David Richards, in written testimony to US
District Judge Colleen Kollar-Kotelly, said that as recently as August 2001 a
senior Microsoft executive had confirmed that RealNetworks was seen as a threat.
Richards central charge against Microsoft survived even though portions of
his testimony and exhibits were struck down by the judge who has repeatedly
cautioned the states for introducing new allegations of wrongdoing.
Microsoft counterpunched during Richards' cross examination, seeking to show
that, despite its complaints, RealNetworks was still dominating media-playing
software.
RealNetworks alleges Microsoft withheld technical data from RealNetworks to
ensure that RealNetworks' audio and video player would not work as well with
Microsoft's Windows operating system as the Windows Media Player.
The RealNetworks executive was the third witness called by a group of nine
states seeking tougher sanctions against Microsoft for violations of antitrust
law. The states have rejected a proposed settlement of the nearly four-year-old
case reached in November with the US Justice Department and nine other states.
Judge excludes material
Before Richards could testify, Kollar-Kotelly agreed with a request from
Microsoft to reject some of his testimony and exhibits, which aimed to show that
Microsoft had forced computer makers to back away from agreements to install
RealNetworks media players in machines they sold.
She called parts of Richards' testimony "classic hearsay."
Included in the rejected material was an e-mail from June 16 of last year in
which AOL Time Warner Inc. executive Barry Schuler told RealNetworks executives
that Microsoft officials "want to kill you guys so badly , it is
ugly."
The day of that memo, talks between Microsoft and AOL about shipping AOL with
the next version of Windows broke down. AOL said Microsoft wanted to scale back
support for the media player supplied by RealNetworks.
Another e-mail exhibit discarded by the judge suggested that computer maker
Gateway Inc. feared retaliation by Microsoft if it went ahead with a contract to
place RealNetworks software on Gateway machines, according to a source familiar
with the material.
"(T)hey will put us out of business," according to an e-mail
account about the 1999 contract negotiations exchanged between RealNetworks
executives, the source said. But most of Richards' 90 pages of testimony was
allowed.
Seen as threat
Richards said that in August of last year Microsoft Vice President Jim
Allchin informed RealNetworks that Microsoft believed its own rival product,
called Windows Media Player, was part of the Windows operating system and
RealNetworks was therefore a platform competitor.
"I do not think there is any question that Microsoft has sought, and
continues to seek, to restrict the distribution, promotion, use and
interpretability of RealNetworks," Richards wrote.
Windows XP contains a function, Richards said, that allows users of Windows
Media Player to easily copy songs on to a compact disc and search their files
for a song. But Microsoft's tactics prevented RealNetworks' media player from
offering the same functions, he said.
Microsoft attorney Richard Pepperman spent the afternoon questioning
Richards, looking to undermine RealNetworks claim to be the victim. Pepperman
displayed one e-mail from Richards in 2000, that tells a RealNetworks sales
executive the company's media player was "ubiquitous" and that 49 of
the 50 top broadcasters used the company's format for streaming media.
In the hearings, which are expected to last up to two months, the states are
trying to make a case for stronger remedies to stop Microsoft from spreading its
dominance to new technologies like media players, hand-held devices and
interactive television controllers.
The states are proposing that Microsoft sell a "modular" version of
Windows that would allow computer makers to strip out add-on features like the
Internet Explorer browser, or Microsoft's media player. They also would force
Microsoft to disclose more about its software and license its browser to other
companies royalty-free.
Microsoft is arguing that the remedies suggested by the dissenting states are
extreme and that any sanctions should be confined to specific findings upheld by
a federal appeals court.
The proposed settlement of the government case is designed to remedy the
antitrust violations by giving computer makers more freedom to feature rival
software on their products, among other things. Judge Kollar-Kotelly is
considering the proposed settlement under a separate proceeding.