Court battle of the computer giants

News Analysis: Conspiracy or just the way business works? The evidence cuts both ways in the Microsoft antitrust case

IT SEEMS unlikely that Bill Gates has often featured in conversations that included mention of Joseph Stalin and Franklin Roosevelt, except perhaps in the muttered asides of conspiracy theorists or the dreams of megalomaniacs.

But just such an exchange - by e-mail, of course - is one of the key pieces of evidence put forward by Microsoft as it sought to defend itself against US Government charges that it abused its powers in the market place. As the trial in Washington ended its second week, Microsoft was fighting back, and using the words of its enemies against them.

The case is moving at a snail's pace, each witness questioned in intricate detail over not just what they did, but what they thought and why they did it. The star turn - Bill Gates - may appear this week on video, but the case will not turn on what Gates alone says.

The federal case rests on a finely-assembled argument about the nature and tactics of Microsoft; the corporation's response will rely on an equally carefully-constructed version of events, which says that Microsoft is no monopolist, acts no differently to any other company, and cannot be penalised for the mistakes of its rivals.

Next on the stand is Apple executive Avadis Tevanian, whose written testimony was released on Friday. He claims that Microsoft altered a key piece of software specifically to disable an Apple multimedia product called "Quicktime" and put pressure on America's largest manufacturer of personal computers, Compaq, not to use the product.

And he says that Microsoft offered a $150m investment in Apple to persuade Steve Jobs, Apple's co-founder, to take the browser. Microsoft is also threatening to take away key software support for Apple, Mr Tevanian claimed.

"Microsoft was aware that Apple desperately needed to maintain support for Microsoft Office for Macintosh," said Mr Tevanian. Apple believed it was "dead" unless it co-operated with Microsoft and accepted the Microsoft browser.

It may sound like damning evidence. But the way that Microsoft has dealt with earlier evidence gives a clear idea of its strategy. The government contended, for example, that Microsoft put the squeeze on America On Line, the largest internet services provider, and persuaded it into a contract that gave AOL a unique relationship with Microsoft to the exclusion of Netscape. On this view AOL was partly the tool and partly the victim of Microsoft.

John Warden, Microsoft's lawyer, presented AOL in a rather different light. AOL had itself sought a unique deal with Netscape, he said.

"We can use our unique respective strengths to defeatthe Beast From Redmond that wants to see us both dead," Netscape co-founder Marc Andreessen wrote to AOL President and CEO Steve Case. "I think it's clear that we have enough respective strengths to give it a hell of a try."

Steve Case was Roosevelt and Netscape President James Barksdale was Stalin, Case argued, in a coalition against Mr Gates, who was, by extension, Adolf Hitler.

AOL, it seems, was playing both sides of the fence. It was also talking to Sun Microsystems about a similar agreement. And when Microsoft came up with a deal, on very advantageous terms, it went with it. That was because Microsoft offered a better deal, Mr Warden contended, and not because of some conspiracy.

The government's case relies heavily on the argument that Microsoft is in a unique position as a monopolist, and that it abused that position to try to put its rival Netscape out of the market for internet browsers. But everything that the government paints as black or white, Microsoft is turning into a delicate shade of grey.

The key June 1995 meeting between Netscape and Microsoft, where the bigger of the two allegedly proposed that they slice up the market between them, has been variously depicted as Netscape's idea, a fiction, and a government set-up. Netscape itself has been painted as, essentially, not up to the task of competing.

David Boies, the government lawyer, repudiates the argument that there is any parallel between what AOL and Netscape may have cooked up in their e-mails, and Microsoft's grand strategy. "You had two companies, neither of which, separately or together, would have monopoly power in any market," he said last week.

Microsoft is a monopolist, the government argues.

But to prove this, it will rely crucially on academic experts who will take the stand over the coming weeks. Franklin Fisher, professor of economics at the Massachusetts Institute of Technology, and Frederick Warren-Boulton, a former chief economist at the Department of Justice, will argue the Government case.

Network effects, Mr Fisher will argue, meant that as more people used the Microsoft product, so the benefits for users increase. "There is nothing inherently anti-competitive about this," he said in a declaration to the court.

"However, network effects create high barriers to competition and entry in operating systems. This increases the risk that anti-competitive conduct by Microsoft will increase barriers even further."

Microsoft has its own experts, including Richard Schmalensee, dean at MIT's prestigious Sloan School of Management, to argue against this. Microsoft is not disputing that it is a dominant force in the industry, but it will argue that this is not monopoly, in the same way that John D Rockefeller owned the oil industry before the Justice department broke up Standard Oil.

Microsoft hopes to establish that if Mr Gates was indeed a Great Dictator, he was only one of several.

"Our agreements were completely common in the industry and they were also completely legal," said Mark Muray, a spokesman for Microsoft.

Suggested Topics
PROMOTED VIDEO
News
Women have been desperate to possess dimples like Cheryl Cole's
people Cole has secretly married French boyfriend Jean-Bernard Fernandez-Versini after just three months.
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Paolo Nutini performs at T in the Park
music
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
In pictures: Breathtaking results of this weekend's 'supermoon'

Weekend's 'supermoon' in pictures

The moon appeared bigger and brighter at the weekend
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor