Their Day in Court
Microsoft finally reckons with allegations
By James Hanback Jr.
NOVEMBER 2, 1998: When the A&E cable network featured Bill Gates as its "Biography of the Year" for 1996, there were a few seconds of footage that could be seen as an ominous portent of things to come. During an interview with Gates conducted by NBC's Tom Brokaw, the program cut to a shot of Gates and President Clinton riding in a golf cart. In spite of their respective legal woes, both Bills were smiling, blissfully enjoying a sunny afternoon on the course.
More than a year later, both would find themselves staring into a camera, recording depositions for their individual court cases; and both would find themselves attacked on all sides. Clinton's ordeal, of course, has been playing out for months now. And last week, on Oct. 19, Microsoft Corp., the computer software giant cofounded by Gates, finally got its day in court. It happened approximately one year after the Justice Department began probing allegations that Microsoft violated its 1995 antitrust agreement by bundling Microsoft Internet Explorer (its World Wide Web browser) with its Windows operating system.
Gates himself was not present for the opening days of the trial. Opposing attorneys pointed to that fact as a sign of weakness. Microsoft's representatives have said publicly that Gates will probably not attend any portion of the trial, which is expected to last about six weeks. It is unlikely, in any event, that Gates' absence will seriously affect the outcome.
Netscape Communications, Sun Microsystems, and others in the computer industry say Microsoft offered them illegal deals to carve up software industry markets, then attempted to crush them when they did not accept those offers. Netscape claims that after it refused Microsoft's offer, Gates' company demanded that Netscape stop making versions of Netscape Navigator for Windows '95. Microsoft attorney William Neukom called the allegations "baseless."
Microsoft says it incorporated Internet Explorer into Windows as a convenience for users, and it denies any wrong-doing in meetings with Netscape and Sun. In fact, Gates in his deposition denied any knowledge of a meeting between Microsoft executives and Netscape, saying he only knew about it after he read about it in the Wall Street Journal.
Government officials, meanwhile, say they have uncovered e-mails to the contrary. Microsoft says the e-mails are being taken out of context.
Regardless of whom you believe, there is no doubt in the minds of many that Microsoft does, indeed, hold a large influence over the computer industry. Currently, between MS-DOS and the various versions of Windows, the company commands about 80 percent of the operating system market.
It also controls a high percentage of the Web browser market, encroaching ever more on the previously dominant Netscape Navigator/Communicator browser. Because of Microsoft's deals with America Online and other services that now use Internet Explorer, Netscape's share in the marketplace has started to dwindle.
Or, as Microsoft attorney John Warden sarcastically puts it: "Netscape had what the government would consider a monopoly in the market for Internet browsers, until the great Satan, Microsoft, came along." Indeed, Microsoft maintains that Netscape and other software companies are merely seeking protection for their market share by bringing in the federal government.
On the other hand, critics find it difficult to believe that so many software companies and the federal government would create fantasy charges simply to circumvent Microsoft's competitive edge in the software marketplace. For years, software manufacturers have said that Microsoft will not allow hardware companies to install competing software packages for shipping with their computers.
Perhaps the time has come for the Apple Computer Inc. solution: When Steve Jobs announced last year that Microsoft had taken a bite of Apple stock, he said that Internet Explorer would come installed as the default Web browser on the Macintosh platform. "But because we believe in choice," he added, "it will also come with a copy of Netscape." True to his word, both Mac OS 8.0 and Mac OS 8.1 have shipped with IE and Netscape, although IE gets default play on the OS desktop, while Netscape is buried inside a folder on the hard drive.
As for the Microsoft trial: The outcome could have far-reaching effects on the way Microsoft and the software industry in general do business. Unless the company can convince the courts that the government and other businesses in the industry are wrong, there is speculation that the giant could, like the Bell phone company, be broken into baby Microsofts.
In any case, it appears that for once, Microsoft and Bill Gates may actually be facing a struggle.
Email James at firstname.lastname@example.org.
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