MS/DOJ: DOJ shores up Barksdale

The end of the first week in the government's antitrust trial of Microsoft has been marked by Department of Justice's release of several dozen confidential correspondences aimed at bolstering its allegations against the software company and the testimony of the only witness to take the stand so far. The correspondences, mostly email messages stamped "highly confidential", provide details about how Netscape Communications' commanding share of the browser market deteriorated after Microsoft began offering its browser for free.

The end of the first week in the government's antitrust trial of Microsoft has been marked by Department of Justice's release of several dozen confidential correspondences aimed at bolstering its allegations against the software company and the testimony of the only witness to take the stand so far.

The correspondences, mostly email messages stamped “highly confidential” that the DOJ has entered into evidence, provide details about how Netscape Communications' commanding share of the browser market deteriorated after Microsoft began offering its browser software for free.

The documents are also intended to corroborate the testimony of Netscape President and Chief Executive Officer Jim Barksdale, who took the stand in U.S. District Court here on Tuesday and testified the rest of the week, often becoming defensive under cross examination. He is expected to continue testifying Monday.

The evidence released by the DOJ yesterday includes notes of a June 21, 1995, meeting at which the government says Microsoft tried to proposed a division of the browser market between the companies. Under the alleged offer Microsoft would have been responsible for creating browsers for the Windows operating system and Netscape would develop for all other platforms.

According to notes of the meeting taken by Netscape co-founder Marc Andreessen, a Microsoft official asks whether Netscape “would be interested in having a partnership where NS (Netscape) gets all the non-Win95 stuff and MS gets all the Win95 stuff.” It isn't clear from the notes who made the statement, but Barksdale has said it was Dan Rosen, Microsoft's general manager of new technology.

Microsoft lawyer John Warden on Thursday said the only fair conclusion from the notes was that Andreessen “invented or imagined a proposal to divide markets,” to which Barksdale answered, “That's absurd.”

Warden last week also introduced evidence that prior to the June 1995 meeting Netscape approached Microsoft about taking an equity stake in the company.

But Barksdale, in answering Warden's questions, downplayed the alleged advances, saying the official who made them, Netscape co-founder Jim Clark, did so without telling anyone else at Netscape and before Barksdale joined the company.

The evidence released by the DOJ also includes correspondences from various businesses, Internet service providers, technology companies and other customers of Netscape, explaining, often in frustrated tones, why they switched loyalty to Microsoft's Internet Explorer.

The DOJ says the evidence supports its suit, which joins the antitrust suit filed by 20 state attorneys general and accuses Microsoft of using its monopoly position in the operating system market to bully companies to switch to its browser and maliciously trying to put Netscape out of business. Microsoft has denied all the charges.

An official at one of the ISPs, Earthlink, described its negotiations with Microsoft as “’medieval,’ meaning that ‘the King’ (i.e., Microsoft) tells you what he wants and you are expected to comply.’” Roberta Katz, senior vice president for Netscape, also quoted Earthlink officials Lee Thoburn and Brinton Young in her August 1996 e-mail to other Netscape executives as saying that in their negotiations with Microsoft the company was very explicit about its “plan to kill Netscape.”

Earthlink signed a contract with Microsoft anyway because, according to Katz, the officials said they had to maintain access to Microsoft’s distribution channel through the sale of its operating system and because “Microsoft is an ‘elemental force’ in the marketplace and they don't want to be on Microsoft's wrong side.’”

In other messages ISPs said Microsoft offered them irresistible amounts of money for advertising, free upgrades of Microsoft products and other incentives if they switched to Internet Explorer; but they also complained about the conditions that Microsoft set, which included prohibiting the distribution of any Netscape products and putting a “viewed better with Internet Explorer” notice at their site.

In other messages Netscape customers report complaints about the compatibility of their Netscape browsers with Windows NT and difficulty using Netscape’s browser to look at Microsoft's corporate Web site. A developer even complains directly to Barksdale about being required to use Internet Explorer to access Microsoft technical specifications.

This “seems to be a blatant restraint of trade,” the developer, Joe Willmann, wrote.

Messages about Microsoft's dealings with computer manufacturers are also detailed. Specifically, the messages are intended by the DOJ to support allegations that IBM, Apple Computer and Acer Computer felt that Microsoft's tactics locked them in to bundling Internet Explorer with their products.

The trial is set to resume Monday with Warden continuing his cross examination of Barksdale, after which the government will have an opportunity to question the Netscape chief.

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