Peter Kaplan
WASHINGTON: The US government's proposed settlement of the Microsoft Corp.
antitrust case would have failed to stop the software giant's illegal campaign
against Netscape in the 1990s, former Netscape chief executive officer James
Barksdale testified on Tuesday.
In written testimony to US District Judge Colleen Kollar-Kotelly, Barksdale
said the settlement plan was full of loopholes and he favored the stiffer
sanctions sought by nine states that have refused to sign the settlement.
"As I review Microsoft's proposed remedy, I reach the unfortunate
conclusion that it would not have helped Netscape in the mid-1990s by preventing
Microsoft's anti-competitive behavior," he said.
Barksdale took the witness stand on the second day of what is expected to be
about two months of hearings into possible remedies in the landmark antitrust
case. The former Netscape CEO, along with an executive from Sun Microsystems
Inc., spent hours defending their testimony in support of the states' proposals
under questioning from Microsoft attorneys.
Under a separate proceeding, Kollar-Kotelly is considering the proposed
settlement of the nearly four-year-old case, reached in November between
Microsoft and the US Justice Department. Nine other states have agreed to sign
the deal.
Last June, a federal appeals court threw out some of the charges against
Microsoft but upheld a lower court ruling that the company had illegally
maintained its Windows software monopoly in personal computer operating systems.
The appellate judges agreed Microsoft had tried to crush rival Netscape
Communications after concluding that Netscape's Navigator browser was a threat
to Windows' dominance.
Fortunes declined
Barksdale on Tuesday said his company's fortunes declined once Microsoft put
Web-browsing software code in the same files that ran the Windows operating
system to prevent the Netscape Navigator browser becoming a platform for
software developers.
The proposed settlement would give computer makers greater ability to feature
rival software by allowing manufacturers to remove access to Microsoft
middleware. The non-settling states, that include California, Iowa and
Connecticut, want Microsoft to produce a version of Windows in which
"middleware," like the browser and media player, can be removed
entirely.
Barksdale said the proposed settlement would just hide Microsoft's middleware
from the user while the states' proposal would give consumers real choice and an
incentive for programmers to support alternative products.
"Had this remedy been in place during the mid-1990s, Netscape would have
been able to compete on the merits," Barksdale wrote of the states' plan.
Netscape was bought in 1999 by online services giant American Online, now AOL
Time Warner Inc., where Barksdale sits on the board of directors.
Microsoft has said the non-settling states' proposals are out of step with
lower-court rulings in the case and are designed to benefit Microsoft's
competitors, such as Sun Microsystems Inc., Oracle Corp. and AOL. Barksdale also
was critical of the settlement provisions intended to grant computer makers
flexibility to alter the appearance of Windows.
Barksdale said there were loopholes that allowed Microsoft to forbid
alterations of Windows when it did not compete with the non-Microsoft software
trying to be featured or if the rival software developer had failed to
distribute one million copies in the United States the previous year.
He said this last definition could have prevented Netscape Navigator from
gaining any user share at all when it first came out because Microsoft could
have prevented computer makers from offering an icon or other means to access
Navigator. During cross-examination, Microsoft attorney John Warden tried to
tear down Barksdale's testimony, noting that one company -- RealNetworks Inc. --
has been successful selling media players as middleware that run on Windows.
Warden cited a RealNetworks press release that claims the company has
distributed its media players to more than 250 million computer users.
Microsoft attacks Java
Earlier on Tuesday, Microsoft sought to portray Sun's Java programming language
as a product threatened by its own shortcomings rather than any anti-competitive
behavior by Microsoft.
Microsoft dropped Java support from Windows XP -- its latest version of
Windows -- and the non-settling states want Microsoft to resume support. The
appeals court in June reversed a lower court finding that Microsoft had violated
antitrust laws by promoting its own version of Sun's Java but concluded the
company had tried to freeze Java out of the market.
During cross-examination of Sun executive Richard Green, Microsoft attorney
Steve Holley on Tuesday cited a Sun memo from August 2001 that said some
customers, including brokerage Merrill Lynch, found Microsoft's software easier
to use.
"All three customers expressed a lack of faith in Sun's ability to
perform," the memo said. "There is little doubt we are suffering from
an image problem." Holley said the complaints undercut Sun's contention
that Java saves corporate customers money by allowing them to run their computer
applications across different platforms.
Green criticized Microsoft for dropping Java from Windows XP, saying there
was no business rationale for doing it. But Green's testimony also came under
the scrutiny of Kollar-Kotelly, who warned the dissenting states that their
witnesses were there to talk about possible antitrust sanctions -- not to level
new accusations against Microsoft.
Kollar-Kotelly said new allegations were out of bounds. "It's not going
to be part of my findings," she said. Sun recently filed a separate
antitrust suit against Microsoft for allegedly impeding its business and harming
Java.