Microsoft Witness Admits Windows Lacks Competition
Microsoft Corp.’s bid for a quick counterattack on the government’s antitrust case ran aground Wednesday as the software giant’s lead witness admitted that Microsoft’s Windows software faces no meaningful competition.
In a relentless cross-examination, lead Justice Department attorney David Boies got Microsoft’s star witness, economist Richard Schmalensee, to qualify his contention that Microsoft could not wield monopoly power because it faces competition from rival computer operating systems such as Linux and BeOS.
Boies asked Schmalensee, “Are you suggesting that Linux is a viable alternative to Windows?”
“In the short run, the answer is no,” Schmalensee admitted.
But the Massachusetts Institute of Technology economics professor went on to add that the sudden surge in interest in Linux as well as the rebound of once-ailing Apple Computer Inc. demonstrates how quickly the competitive landscape can shift in the personal computer industry.
However, Boies countered by showing Schmalensee his October deposition in which the economist said he was “not aware of anything that at present would count as viable competition” to Microsoft’s Windows operating system, which runs more than 90% of the world’s modern personal computers.
Schmalensee’s admission that Windows faces no significant competition came as Judge Thomas Penfield Jackson rejected several Microsoft legal motions to exclude previous testimony, as well as a separate request to end the trial on the grounds that the government had failed to prove any of its allegations.
Proving that Microsoft has monopoly power is a critical element in the charges being leveled against the company by the Justice Department, 19 states and the District of Columbia. Such proof is widely seen by legal experts as a prerequisite to finding that Microsoft violated antitrust statutes.
But Redmond, Wash.-based Microsoft and its supporters say the charge is among the government’s weakest. They also contend that the government has failed to show any harm to consumers, who they say are benefiting from lower-priced and more powerful software.
“In its rush to judgment, the government has failed to stop and learn about the benefits to customers, who are the consumers of the innovation and low prices that Microsoft has championed and made a reality in the PC software marketplace today,” said William H. Neukom, Microsoft’s general counsel.
Earlier Wednesday, the government introduced more than 370 documents and depositions as it rested its landmark antitrust case.
The documents introduced included more defiant testimony from the August deposition of Microsoft Chairman Bill Gates, as well as hundreds of pages of company e-mails and industry market data.
In a statement issued Wednesday, Microsoft called the release of the documents “a last-ditch effort to distract the public from the core issues in this case.”
Schmalensee will be followed over the next few months by two computer industry executives and nine Microsoft officials--but not Gates, whom company lawyers say they will not call to the witness stand. The trial, which began Oct. 19, is expected to last until spring.
