http://www.infobeat.com/stories/cgi/story.cgi?id=2556822580-813 08:49 PM ET 10/28/98 Microsoft says others behaved like it (New throughout) By David Lawsky WASHINGTON (Reuters) - Microsoft Corp. tried to turn the tables in court Wednesday, charging that America Online Inc. engaged in the same type of behavior that prompted the government to file antitrust charges against the software giant. Facing allegations it illegally proposed carving up the market for Internet browsers with Netscape Communications Corp. , Microsoft pointed to evidence that AOL and Netscape had discussed staying out of each other's lines of business. The tactic by Microsoft attorney John Warden seemed designed to raise doubts in the judge's mind about where to draw the line between market division and strategic alliances. The Justice Department and 20 states have accused Microsoft of using its monopoly in personal computer operating systems to try and intimidate Netscape into agreeing to divide the browser market at a June 21, 1995, meeting. Microsoft has said it was merely trying to propose a strategic alliance -- which Netscape rejected. On Wednesday afternoon, day seven of the trial, Warden for Microsoft focused on a Dec. 11, 1995, memo from AOL President Steve Case that proposed what was described as a strategic alliance. AOL and Netscape feared the clout of Microsoft and tentatively agreed to work together to combat the larger firm, which they had dubbed ``the beast of Redmond.'' Case wrote in the memo that Netscape had promised to ''remain a software company'' and pledged it had ``no plans or interest in entering the online services business'' for three years. Warden cross-examined AOL vice president David Colburn about his company's dealings with Netscape and in particular about the memo, which he suggested amounted to a report of illegal market division. ``In your various meetings with the Department of Justice to suggest that they go after the 'beast from Redmond', did you disclose you'd made a market division proposal?'' Warden asked. ``Your wording, not mine,'' shot back Colburn. At another point, Colburn said he ``wouldn't call'' the agreement market division. AOL is the biggest single provider of on-line services, with more than 13 million customers. It offers its own on-line environment as well as access to the Internet. Earlier Wednesday, Colburn testified that AOL's March 1996 decision to choose Microsoft's Internet browser was done to compete with Microsoft rather than for technical reasons. AOL was facing competition from MSN, an on-line service owned by Microsoft that the Redmond, Wash.-giant was able to cheaply promote through an icon on the first screen or desktop of the Windows 95 operating program. In contrast, AOL was having to distribute its software through computer makers, paying a bounty for each customer it snared, Colburn said. In return for using its browser, Microsoft put an AOL icon in a ``folder'' on the Windows desktop that contained a list of Internet service providers. In cross examination, Warden tried to suggest that AOL chose the Microsoft browser because it worked better than Netscape's. ``Isn't it a fact that the most important factor in choosing between Microsoft and Netscape was getting software that worked with your client?'' Warden asked, using the word ``client'' to mean the software AOL provided to its customers. ``No,'' replied Colburn. ``There were five factors. The most important in my mind, as the lead negotiator, was securing parity with MSN.'' He said that the other priorities were, in order, how much AOL would have to pay, whether the Web browser would work with the widely distributed Microsoft Windows, its flexibility of use with other browsers and, last, whether the technology worked. Microsoft Spokesman Mark Murray said on the courthouse steps there was ``startling new evidence'' the two companies worked together against Microsoft. He said the draft agreement to stay out of each other's business was ``far more explicit than anything that the government is accusing Microsoft of.'' Government lawyer David Boies expressed no surprise that AOL and Netscape would try to cooperate. ``Small companies get together all the time, particularly when they have to compete against a monopoly,'' Boies told reporters. Colburn's cross examination is due to continue Thursday. The trial before District Judge Thomas Penfield Jackson is expected to last into December. ^REUTERS@ ____________________________________________________________________ -------------------------------------------------------------------- Join The Web Consultants Association : Register on our web site Now Web Consultants Web Site : http://just4u.com/webconsultants If you lose the instructions All subscription/unsubscribing can be done directly from our website for all our lists. ---------------------------------------------------------------------
