Microsoft Calls Final Witness in Antitrust Case

by Alex Woodie

Microsoft called its eighteenth and final witness last week in the appeal of its antitrust lawsuit, and the nine states that are dissenting a settlement put forth by the Justice Department and nine other states involved in the suit declined to call additional rebuttal witnesses to the stand. These two moves mark an end of testimony in the case, which is the second that Microsoft has faced for alleged anticompetitive acts committed in the computer marketplace. Now the fate of Microsoft rests with U.S. District Judge Colleen Kollar-Kotelly, who will rule on the penalties Microsoft will face after having been declared a monopolist.

For the next few weeks, attorneys for Microsoft and the nine states that declined to take part in the DOJ settlement, including the District of Columbia, will argue motions before Kollar-Kotelly, who is expected to take about a month to review the testimony and evidence she has heard during the eight-week trial. If that schedule holds true, closing arguments from both sides will be heard in June. The two parties in the suit were expected to hold a conference call Monday to set a schedule for the remainder of the trial, but what they decided as a result of that call were not available as this issue of Midrange Server went to press.

At issue in the hearing is how Microsoft should be punished for its monopolistic actions, which two federal courts have ruled that Microsoft is guilty of. The proposed remedy of Federal District Judge Thomas Penfield Jackson in the original antitrust lawsuit--breaking up Microsoft--was thrown out by the DOJ soon after President George W. Bush took office last year. In its stead, nine out of the original 18 states have signed off on an alternative form of punishment that includes letting computer makers remove the icons for Microsoft applications--such as Office, Internet Explorer, Windows Messenger, and Windows Media Player--from the desktop of the computer.

But the other nine of the 18 states--including the District of Columbia--are dissatisfied with that proposed remedy and instead want to impose a stiffer penalty on Microsoft. These states are proposing that Microsoft should be forced to produce an "unbound" version of Windows that does not come pre-loaded with, and who's functioning is not directly tied to, Microsoft's applications--as opposed to merely removing the application icons from the desktop. The states are also seeking to force Microsoft to disclose the source code for Windows, to provide support for Java, and allow Microsoft Office to be ported to run on other operating systems.

Microsoft has fought the state's proposed remedy tooth and nail, and has even called Microsoft co-founder and chairman Bill Gates as a witness--something that analysts following the case say the software giant should have done in the original trial. Gates initially said creating an unbound version of Windows would be practically impossible and would force Microsoft to remove Windows from the market, but he eventually had to admit that it was technically possible to do it. Microsoft chief executive Steve Ballmer also testified that forcing his company to develop a modularized version would break Windows .

Microsoft already manufacturers a version of Windows that is not closely tied to the applications at issue. Windows XP Embedded is used in industrial applications such as ATM machines, cash registers, and slot machines, and gives users the option of installing applications such as Explorer. The dissenting states made heavy use of the existence of Windows XP Embedded as proof that Microsoft could indeed create a modularized version of Windows, and that it would work. Microsoft's witnesses were forced to acknowledge this fact, but maintained in their defense that it would force them to replace quite a bit of functionality that the applications provide the operating system, and that it was basically unfeasible.

The dissenting states made a minor gaffe last week in their request to show Kollar-Kotelly a demonstration of Windows XP Embedded. Attorneys for Microsoft said they did not have enough time to prepare a rebuttal based on the tens of thousands of pages of evidence the dissenting states presented the court along with their request to present a Windows XP Embedded demo. The states eventually revoked their request to hold a demo, which was scheduled for today, following a tongue-lashing from the judge, who has walked the straight and narrow with regard to the fairness of the proceedings to both parties.