Microsoft Raises Issue of a Rival Deal

Microsoft Corp. confronted an executive with rival Sun Microsystems Inc. with e-mail Thursday that suggested his company offered in late 1997 to cease work on its Internet browser software and agree not to compete with Netscape Communications Corp.

Citing the e-mail, Microsoft accused Sun, then developing its HotJava Internet browser, of proposing to “unify browser efforts [and] stop competing” with Netscape. Netscape at the time was the world’s most popular browser. HotJava never was sold as a commercial product.

The allegation is significant because one of the government’s central claims against Microsoft is that it tried illegally to divide the market with Netscape for Internet software in June 1995, months before Microsoft began offering its browser, the software that lets people view information on the Internet.

Spokesman Mark Murray criticized the government’s “irresponsible double standard” in challenging Microsoft’s competitive position and called Sun’s alleged offer “certainly far more explicit and far more questionable than anything Microsoft discussed with Netscape.”

The government said it had no evidence that Sun’s alleged offer was carried forward, and little information was available about the context of any agreement between the companies.

“The fact somebody else raises competitive problems doesn’t get Microsoft off the hook,” Justice Department lawyer David Boies said outside the courtroom. “Whatever two companies did doesn’t make an antitrust violation appropriate. The everybody-else-does-it defense really doesn’t work.”

Microsoft’s lawyer, Tom Burt, used the e-mail from Sun employee Karen Oliphant to confront James Gosling, a vice president and one of Sun’s top scientists.

In the 1997 message, Oliphant describes “Sun’s goals and the key items we would like” from a proposed agreement with Netscape.

The first item reads: “unify browser efforts; stop competing.” Another e-mail, sent in September 1997 by Oliphant’s co-worker, describes Sun’s goals with Netscape as “unified browser effort” and “get [Sun] and [Netscape] on one browser.”

Gosling testified he was unaware of any deal with Netscape to end Sun’s development on its HotJava browser. But he acknowledged that it was “certainly the case that Netscape wasn’t happy about the existence of HotJava.”

A Sun spokeswoman, Lisa Poulson, called Oliphant’s e-mail “a proposal by a very junior person” but said the company’s HotJava was “never intended to be a competitor.” She said it was developed to demonstrate Sun’s technology and is now used by Sun employees.

Earlier Thursday, Microsoft belittled Sun’s rival computer technology, called Java, suggesting that its troubled early years were Sun’s own fault rather than the result of illegal behavior by Microsoft.