MS/DOJ: Maritz denies DOJ's allegations

Microsoft Corp. has not tried to intimidate rivals, and claims by Apple Computer Inc. that Microsoft sabotaged its QuickTime multimedia player are 'insulting,' said Microsoft Corp. executive Paul Maritz in written testimony released last week in the U.S. government's antitrust case against the software company. Maritz also said he knew of no proposal to divide the browser market with rival Netscape Communications Corp.

Microsoft Corp. has not tried to intimidate rivals, and claims by Apple Computer Inc. that Microsoft sabotaged its QuickTime multimedia player are "insulting," said Microsoft Corp. executive Paul Maritz in written testimony released last week in the U.S. government's antitrust case against the software company. Maritz also said he knew of no proposal to divide the browser market with rival Netscape Communications Corp.

With the release of Maritz's testimony, Microsoft begins its defense of specific actions the government said the company took to rein in competitors, such as Netscape and Apple, and even its presumptive ally, Intel Corp.

Maritz, the group vice president for platforms and applications, is expected to take the witness stand Monday. Microsoft's first witness, Richard Schmalensee, dean of the Sloan School of Management at the Massachusetts Institute of Technology, is expected to finish his testimony Monday morning.

Only a few pages of Maritz's 160-page written testimony discuss the company's relationship with Netscape. But it is that relationship -- and particularly the by now infamous June 21, 1995 meeting held by the two companies -- that has been a key piece of evidence in the government's claim that Microsoft has abused its monopoly power.

Maritz wasn't at the June 21 meeting, but he had met a few weeks earlier with Netscape officials. To back its claim that Microsoft wanted to divide the browser market, the government introduced as evidence an e-mail that Maritz sent in June 1995 to Microsoft Chairman and Chief Executive Officer Bill Gates, in which Maritz wrote: "Move Netscape out of Win32/Win95, avoid battling them in the next year."

In his testimony, Maritz said that Dan Rosen, Microsoft's director of new technologies, will testify "in considerable detail" about that meeting and the events leading up to it.

But Maritz said that an earlier June meeting with Netscape president and chief executive officer Jim Barksdale was cordial "and contained not even a hint of 'market division.' "

"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.

Maritz also addresses the charges made by Intel vice president Steven McGeady, a government witness, that Microsoft had made a "credible and fairly terrifying" threat against the company over the development of its Native Signal Processing (NSP) software.

Intel's NSP aimed to improve PC multimedia performance by allowing applications to interact directly with the hardware.

McGeady testified that Microsoft feared competition from Intel in software development, and that it threatened to withhold operating system support for Intel's MMX multimedia technology and for the 64-bit chip now known as Merced. McGeady said Microsoft's pressure ultimately led Intel to dismantle the software unit which he headed.

But Maritz said Intel's NSP software was not compatible with Windows 95, nor could it run on Windows NT. "In other words, Intel's NSP software was a full generation behind Microsoft's operating system development efforts," he said.

Customers who had installed NSP on computers running Windows 3.1 would suffer various problems if they later upgraded their operating system to Windows 95, said Maritz.

In his testimony, Maritz also denies any effort by Microsoft to withhold MMX support, and said it was Intel the one that delayed providing Microsoft with information about that technology.

Maritz also disputes the charges made by government witness Avie Tevanian, a senior vice president at Apple, that Microsoft sabotaged Apple's multimedia player, QuickTime, so that it wouldn't operate with the Windows operating system.

Maritz said he will leave the "indeed, insulting" claim to another Microsoft witness, Eric Engstrom, the company's general manager for multimedia.

Maritz also disputes Apple's allegation that Microsoft threatened to cancel the Macintosh version of Microsoft Office if Apple didn't agree to make Internet Explorer the default browser on Macintosh computers.

Instead, Maritz portrays Apple in his testimony as the hardball player, quick to seek litigation over patent claims, including a US$1.2 billion [B] infringement claim.

Microsoft and Apple entered into an agreement in August 1997 that settled the patent disputes. The agreement "provided very substantial benefits to both parties, and helped to stabilize Apple's business," said Maritz.

The agreement included a $150 million investment in Apple, continued development of the Macintosh version of Microsoft Office for 5 years, and distribution of Internet Explorer, he said.

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