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ANTICIPATED VIDEO testimony by Bill Gates was not played in the second week of the anti-trust case brought against Microsoft by the US Department of Justice (DOJ) and 20 states last week. Excerpts from the tape of the Microsoft chairman's pre-trial deposition are thought to be potentially damaging to the company, at least in terms of public relations.

The DOJ says Gates was uncooperative, evasive and "displayed a particular failure of recollection". Microsoft denied accusations that they were trying to buy time for the defence with extensive cross-examination of witnesses and said the video was a side issue designed to distract from the legal arguments.

Following completion of the cross-examination of Netscape's chief executive officer, Jim Barksdale, Microsoft's lawyer, John Warden, questioned David Colburn, AOL senior vice-president, about the relationship between Microsoft and AOL. The DOJ argued that AOL had been pressured into using exclusively Microsoft's Internet Explorer browser instead of the rival browser from Netscape. Colburn admitted that AOL users were free to use Netscape as their preferred browser "if they can figure out how to get it".

Warden produced AOL memos to suggest that the reasons for the choice were that Internet Explorer was technically a better piece of software and that Netscape was insensitive to AOL's needs. Colburn insisted that fear of Microsoft and the threat of not having an AOL icon on the Windows desktop underscored the decision to choose Microsoft's browser.

By the end of the week, only two witnesses had completed testimonies. With two dozen witnesses still to appear, the trial may now go on into February.

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THE DTI has commissioned the business advisory firm KPMG and solicitors Denton Hall to carry out a review of the Internet Watch Foundation (IWF) with a confidential website ( that allows the public anonymously to express their views on illegal content on the Internet and the work of the IWF. "We hope the public will use the website as a secure and confidential method for giving us their opinions on the issues," Paul Styles, a KPMG director, said.

The IWF was launched in September 1996 to address the problem of illegal material, especially child pornography, on the Internet in the UK. It is an independent organisation which aims to implement the proposals jointly agreed by the Government, the police and the major UK Internet service provider trade associations. Feedback and results of the review will be available by the end of the year.

A US district judge last week overturned a temporary restraining order and denied the request of the Recording Industry Association of America (RIAA) to issue an injunction against Diamond Multimedia, preventing the release of its Rio PMP300, a Walkman-like device that lets users play MP3 music files downloaded from the Net. The RIAA claimed that marketing the Rio violates a 1992 home recording act, which requires makers of digital recording devices to pay a two per cent royalty to the music industry. It also said the player encourages piracy. However, James Burger, a former member of Apple's legal team who helped draft the act, said that although use of the Rio is governed by copyright laws, the home recording legislation does not cover devices that record from computers.

"This is a great victory for music fans around the world and a wonderful day for independent record labels and aspiring artists, who now have an exciting alternative channel for the distribution of their music," said Bob Kohn, chairman of the online music company GoodNoise. "This case pitted the RIAA, which represents the six big record distributors, against indie labels and young recording artists. The RIAA was wrong on the law, and the judge recognised that."