Witness Tells of Microsoft Favor for His Testimony

WASHINGTON -- Microsoft Corp.’s first witness in its antitrust battle against nine states said in court Tuesday that Chairman Bill Gates convinced him to testify after suggesting Microsoft would return the favor with a key product endorsement.

W.J. “Jerry” Sanders III, chief executive of computer chip maker Advanced Micro Devices Inc., also acknowledged that he hadn’t examined a proposed settlement accord between Microsoft and the Justice Department or an alternative proposal put forward by the District of Columbia, California and eight other holdout states seeking tougher punishment of the software giant.

Questioned by Howard Gutman, an attorney representing the holdout states, Sanders said Gates characterized the states’ proposal as “crazy” and said it would fragment Microsoft’s flagship Windows operating system.

“You agreed without knowing what you would be testifying to other than the characterization that Mr. Gates gave you?” Gutman said.

“If there’s no fragmentation in the remedies, my appearance here is irrelevant,” said Sanders, whose company is the No. 2 producer of microprocessors behind archrival Intel Corp.

Gutman told the courtroom that Sanders asked for Microsoft to announce support for its next-generation microchip, code-named “the Hammer,” to give Sanders’ company a leg up on Intel, which was developing a competing chip.

“Mr. Gates said he would talk to his people about that?” Gutman inquired of the Feb. 8 call by Gates to Sanders.

“Yes,” Sanders said.

Lawyers for both sides have directed much of their firepower at attacking the motivations of witnesses, most of whom are either rivals or partners of Microsoft.

The exchange between Sanders and Gutman, for instance, recalled efforts by Microsoft lawyers this month to discredit industry experts put on the stand by the states.

But some legal experts say lawyers in the trial also will have to address the core issue of the remedy proceedings before U.S. District Judge Colleen Kollar-Kotelly: How deeply did Microsoft’s antitrust conduct damage competition for computer operating systems and how should the damage be remedied?

The holdout states--which also include Iowa, Utah, Massachusetts, Connecticut, Kansas, Florida, Minnesota and West Virginia--want Microsoft to produce a modular version of Windows that can be customized by consumers and PC makers. To prevail, the states must demonstrate that such a stripped-down product would help restore software competition and remedy Microsoft’s past anti-competitive conduct.

“Attacking a witness’ bias is not a substitute for not having a response on the merits,” said Andrew Gavil, a law professor at Howard University. “It’s a truism that parties come to the table with a point of view.”