WASHINGTON -- The antitrust trial of Microsoft opened with a bang as U.S. government lawyers portrayed a company that will use any means necessary to defend its Windows monopoly and extend its success on the desktop to the Internet.
The government went on the attack immediately in its opening statements, claiming the sole reason that Microsoft bundled Internet Explorer into Windows and gave away the browser for free was to crush rival Netscape Communications.
New York Assistant Attorney General Stephen Houck and the U.S. Department of Justice's David Boies jointly delivered the government's opening salvos here in District Court Judge Thomas Penfield Jackson's courtroom.
In his opening remarks, Boies called into question Microsoft's credibility -- and specifically that of Chairman and CEO Bill Gates. Frequently asking Jackson to listen to Microsoft's current accounts of events vs. written records, Boies used his time to contrast statements made by Gates in his videotaped deposition with e-mails and memos he sent in 1995.
For example, asked during his deposition if he had any knowledge about the substance of a meeting between Netscape and Microsoft in June of 1995, Gates said the first time he heard about the meeting or that anything was at issue in it was when he read a Wall Street Journal article this spring.
Boies then presented e-mail penned by Gates on May 31, 1995, and sent to Microsoft executives Paul Maritz, Dan Rosen and Brad Silverberg.
"I think that there is a powerful deal of some kind we can do with Netscape," Gates wrote. Later in the message Gates said a deal would be based on the "concept . . . that for 24 months they agree to do certain thing on the client and we agree to help them make their server business successful."
Gates wrapped up the e-mail by saying, "I really want to see something happen!!"
Asked in the deposition if he had any knowledge about Microsoft offering to divide up the browser market with Netscape or to possibly invest in the company, Gates said he only heard about that idea after the meeting with Netscape took place.
Offer 'em cash
However, in that same May 31 e-mail, Gates suggested that "We could even pay them money as part of the deal, buy a piece of them or something."
Boies also highlighted three separate accounts of what took place at the meeting -- using notes taken at the meeting by Netscape's Marc Andreessen, an e-mail obtained from America Online Inc. and internal memos from Microsoft that, according to Boies, all show a deal was in the works and that if Netscape didn't go along with it, Microsoft would crush the company.
"This, your honor, in and of itself is a clear example of attempted monopolization," Boies said.
Boies went on to describe subsequent Microsoft attempts to bully the computer industry illegally by pulling out memos and e-mails sent regarding Apple Computer and Intel. In the Intel case, Microsoft was clearly trying to pressure it not to support Netscape or the Java language, according to Boies.
More e-mail evidence
In one e-mail shown today, Gates responds to a proposal made by Advanced Micro Devices Inc. by saying to other Microsoft executives that that he would be glad not to back AMD if Intel would back down on its support for Java multimedia.
Boies characterized this as Gates crafting a deal to pressure Intel.
"If you stop supporting my competitor, I'll stop supporting your competitor," Boies said. "That, your honor, is a clear example of the type of thing that the antitrust laws are designed to prevent."
In his opening statements, Houck made sure the court understood the government's position -- that Microsoft has a monopoly and has been abusing it.During his statements, Houck showed a graph created by International Data in 1997 that describes market share in operating systems from 1991 into the year 2001. Consistently throughout the chart, Microsoft held better than 90 percent market share.
Claim: MS hurt consumers
Calling the joint action of 20 states and the District of Columbia the largest of its kind, Houck said the reason for their involvement in the antitrust case is that Microsoft's actions in the computer industry have hurt consumers by limiting choice.
"Without competition, users take what Microsoft offers or, more accurately, what the PC market offers them," he said.
Houck also highlighted internal Microsoft e-mails and memos regarding operating system pricing as it compares to pricing of other facets of the PC, pointing out that Microsoft itself has no real threat of a competitor -- the only possibility being Java, Netscape or an OEM or group of OEM joining forces to contract with a separate company to build a rival operating system. All three options were dismissed by Microsoft executives.
The DOJ is expected to finish its opening statements this afternoon, after which Microsoft will begin its defense arguments. The first witness to be called is expected to be Netscape's CEO Jim Barksdale.
