06:26 PM ET 09/15/98
Microsoft executive tried to persuade Netscape
By David Lawsky
WASHINGTON (Reuters) - A Microsoft Corp. executive testified
that his company ``absolutely'' meant to persuade rival Netscape
Communications Corp. not to compete against it in a big part of
the market for Internet Web browsers, according to testimony
cited in a court ruling this week.
In a decision rejecting Microsoft's attempt to have
government antitrust allegations thrown out, Judge Thomas
Penfield Jackson said Monday that the testimony created a
''genuine dispute'' about whether Microsoft may have violated
the nation's antitrust laws.
The testimony concerns a controversial meeting between
executives of Netscape and Microsoft on June 21, 1995. At the
time, Netscape Communications manufactured the dominant browser
for the Web, Netscape Navigator.
Netscape officials have said for months that Microsoft was
trying to get them to allocate markets at the meeting. But
Microsoft has denied it.
Since then, Microsoft's rival Internet Explorer has captured
a large share of the market and is now part of its Windows 98
operating system.
Jackson's ruling characterized the 1995 get-together this
way:
``Chris Jones, Microsoft's then group manager for Internet
Explorer, participated in that meeting,'' Jackson wrote. ``In
deposition testimony, Mr. Jones indicated that Microsoft
'absolutely' intended to persuade Netscape not to compete and
offered as a quid pro quo the prospect of Microsoft's staying
out of browser development for non-Windows platforms.''
While Microsoft declined to comment on the judge's decision,
it vehemently denied that it did anything illegal and
characterized the get-together as a normal business meeting.
``We think that the government is misrepresenting Mr.
Jones' deposition testimony,'' said Mark Murray of Microsoft.
To buttress its views, Microsoft released part of Jones'
testimony, which it has protected as confidential until now.
Here is the full question from a Justice attorney and the
answer by Jones, according to Microsoft:
``Q: Do you recall any discussion about a desire of anybody
on the part of Microsoft who was participating to be able to
persuade or influence Netscape not to compete with Microsoft?
``A: Absolutely. But again, persuade in the sense of force
or persuade in the sense of, hey, we think we can have a great
business relationship together. It's the same as my previous
one.''
``We think the facts will show that the meeting was nothing
more than a typical meeting between two software companies that
develop complementary products to discuss potential business
strategies and ways to make sure their products work well
together,'' Murray said.
Based on the limited excerpts of the transcript, Steve
Newborn, an antitrust lawyer at Rogers & Wells who worked on the
Microsoft case many years ago when he was at the Federal Trade
Commission, saw things differently.
``If Mr. Murray is correct that this is what goes on in
Silicon Valley then there are a lot of jail sentences in the
offing for a lot of Silicon Valley executives,'' Newborn said.
Newborn said the judge was citing ``naked market allocation
that could be prosecuted under either civil or criminal laws,
depending on the circumstances of the meeting.''
He noted that the Sherman antitrust act prohibits market
allocation and that companies have paid hundreds of millions of
dollars in fines in recent years for violating it.
The exchange in the deposition is also important because the
government argues that Microsoft's intent to dominate the
browser market can be inferred from an attempt to solicit
Netscape to participate in an illegal market scheme.
In his decision Monday, Jackson set an Oct. 15 date for the
antitrust trial.
The Justice Department and 20 states assert that Microsoft
has illegally preserved and extended a monopoly in the Windows
operating system for personal computers.
Jackson's opinion can be found on the Web at
http://www.dcd.uscourts.gov.
^REUTERS@
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