Microsoft Blames Netscape for Deal Losses
Attacking the heart of the government’s antitrust case, Microsoft Corp.’s lawyer argued Monday that it was bumbling by Netscape Communications Inc. rather than bullying by Microsoft that led to Netscape’s loss of key software deals with Intuit Inc. and America Online Inc.
Concluding four days of cross-examination of Netscape President James Barksdale, Microsoft lawyer John Warden produced several Netscape memos suggesting that AOL, the nation’s largest Internet service provider, and Intuit, the nation’s No. 1 maker of personal finance software, spurned Netscape because it was not able to produce a browser that would integrate well with their products. By contrast, Warden said, Microsoft jumped at the opportunity to offer them customized versions of its Internet Explorer Web browser.
“Intuit wanted to give you the business but you couldn’t deliver, isn’t that true?” Warden boomed at Barksdale, one of the government’s most important witnesses.
“No,” Barksdale responded, later adding, “This is very similar to the AOL situation. We were willing to do [what it took] in return for an agreement.”
Netscape’s inability to establish its Navigator software as the default Web browser for Intuit’s 10 million Quicken customers and for AOL’s 13 million subscribers is central in the landmark antitrust suit. The AOL and Intuit deals contributed mightily to Microsoft’s market-share gains at the expense of Netscape in the last year. The government cites those deals as evidence of Microsoft’s attempt to monopolize the Internet browser market.
The government alleges that Microsoft uses its software monopoly to force computer makers, software developers and companies providing access to the Internet to use its Internet Web browser and other products.
Warden cited an internal document from Netscape Vice President Dan Shader saying Netscape “offered but did not deliver on” several key technologies Intuit was seeking.
Warden also confronted Barksdale with a chat group message posted by one of Netscape’s own employees that derided Netscape’s Internet software.
Barksdale said the chat group was simply an in-house online forum for employees to vent steam.
Warden also reiterated his contention that Netscape manufactured charges that Microsoft offered to illegally divide the Internet software market in a meeting with Netscape in June 1995.
Warden added a new charge, however. He accused the Department of Justice of withholding a letter from former Netscape lawyer Gary L. Reback to the Justice Department that, he claimed, supported the notion that Microsoft was “set up” by Netscape, that its meeting with Microsoft executives in June 1995 was an attempt to lure Microsoft into making an anti-competitive business proposal.
The Justice Department contested Warden’s accusation and filed a motion with U.S. District Judge Thomas Penfield Jackson, claiming that it was not aware the letter was relevant to Microsoft’s case until recently.
