MS/DOJ: Microsoft to depose AOL's Case on Friday

Microsoft will depose America Online Chief Executive Officer Steve Case on Friday as part of the company's ongoing probe into AOL's merger with Netscape Communications. Microsoft wants to show, through a series of depositions of key players involved in the agreement, that the November 1998 announcement of the $US4.2 billion merger offers strong proof of competition in the software industry.

Microsoft will depose America Online Chief Executive Officer Steve Case on Friday as part of the company's ongoing probe into AOL's merger with Netscape Communications Corp.

Microsoft wants to show, through a series of depositions of key players involved in the agreement, that the November 1998 announcement of the $US4.2 billion merger offers strong proof of competition in the software industry. That merger has been a cornerstone in Microsoft's defense strategy in the antitrust case filed by the U.S. Department of Justice and 19 states.

Microsoft also wants to prove that AOL delayed finalising the merger negotiations until after two of the government's key witnesses had testified on behalf of the government in the antitrust case -- James Barksdale, the former chief executive officer of Netscape, and David Colburn, a senior vice president at AOL. The trial began Oct. 19. The merger was announced Nov. 23.

Netscape and AOL witnesses deposed earlier by Microsoft have testified that talks began about two months before the start of the trial.

Microsoft has also called Colburn as a "hostile" rebuttal witness. The company intends to question the AOL executive about his court testimony in light of AOL's merger talks with Netscape.

Government attorneys believe the merger has little bearing on its antitrust case and whether Microsoft broke any laws. However one antitrust expert said the facts surrounding the merger may help Microsoft.

"I think the America Online-Netscape merger is Microsoft's strongest real-time proof that viable competition is ready and willing to take market share," said Hillard Sterling, an attorney at Gordon & Glickson PC in Chicago.

The deposition of Case, which will be held at the Grand Hyatt Hotel in Washington, will be open to the public as a result of a successful court action filed by a number of news organizations seeking to attend the depositions.

The trial is expected to resume June 1 unless Microsoft settles the case. The two sides have been involved in settlement talks.

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