Microsoft Witness Questions Penalties

Tough antitrust penalties sought by nine states against Microsoft Corp. would hurt consumers and encourage other companies to use federal antitrust law as a substitute for their own research and development, an economist said.

Testifying as an expert witness for Microsoft, University of Virginia professor Kenneth G. Elzinga said the remedies proposed by the states would raise consumer prices and stifle innovation by Microsoft and other high-tech companies.

If Microsoft is required to disclose technical information about its Windows operating system, Elzinga said it would result in “a dampening of incentive” for companies to do their own research and development.