MS/DOJ - States' case winds down

The US states seeking tougher remedies in the Microsoft Corp. antitrust case were expected to rest their case before the end of today, giving Microsoft the opportunity to refute testimony from 15 state witnesses who argued for broad remedies against the software giant.

Microsoft’s first witness will be W.J. Sanders, chairman and CEO of Sunnyvale, Calif.-based microprocessor manufacturer Advanced Micro Devices Inc.

Sanders will testify about the benefits of Windows as a stable and consistent platform that has contributed to the industry's growth. He is also expected to warn that any balkanization of Windows would harm consumers and a variety of companies.

The last witness for the states was Carl Shapiro, a professor of business strategy at the University of California at Berkeley's Haas School of Business and the state's economic witness. He was forced to defend his support for open sourcing against the troubled experience of Netscape's 1998 decision to open its browser source code.

Shapiro today also defended a remedy -- sought by the nine states that rejected the Bush administration settlement of the case as too weak -- that would force Microsoft to distribute the Java virtual machine with Windows.

Indirectly comparing Java to the flawed Edsel automobile of the 1950s, Microsoft attorney Michael Lacovara said efforts to use Java to create full-featured applications such as Navigator or Corel Corp.’s WordPerfect had failed.

For Java to become a "meaningful threat" to Windows, would it have had to support a broad class of applications? asked Lacovara.

"In time," Shapiro said in response.

In earlier testimony, Shapiro had to square his support for the open-source remedy for Internet Explorer -- sought by the nine nonsettling states that have refused to sign the Bush administration-backed settlement -- against the record.

Shapiro, along with a co-author, praised Netscape's decision in a 1998 op-ed published in The Wall Street Journal titled "A Judo Blow Against Microsoft," as a decision that would lead to more browser innovation. Since it was an open-source product, developers had the ability to improve the browser's basic operation and functionality.

Lacovara used the experience of the Navigator open-source effort, called Mozilla, to underscore his point that by opening Internet Explorer's source code, there was a risk that the browser could be fragmented, leading to incompatibilities with the Windows operating systems. Mozilla is expected to release Version 1.0 of its browser in the next few weeks.

Shapiro, however, insisted that Microsoft is in a better position to prevent that from happening, although he acknowledged that there is some risk for problems. He said the court could reduce that risk by requiring Microsoft to license the source code only for its current version of Internet Explorer, and not future ones as required under the state remedy.

Shapiro outlined the economic case for several remedies, including making Office available for other operating systems such as Linux; requiring complete disclosure of Windows interfaces to third-party developers; and giving PC makers more leeway to configure desktops.

Under this proposal, Microsoft would be forced to auction Office licenses to vendors for the right to port the suite of applications to other operating systems. An official at Linux vendor Red Hat Inc. testified earlier in the hearing that that company would likely bid for an Office license.

Shapiro said such remedies are needed to restore competition.

After Sanders, of Advanced Micro Devices, testifies, Microsoft's witnesses this week could include Kevin Murphy, an economics professor at the University of Chicago Graduate School of Business.

The company also plans to call a number of independent software vendors, including Chris Hofstader, vice president of software engineering at Freedom Scientific Inc.; Heather Davisson, CEO of Opus-I Inc.; Brent Frei, CEO of Onyx Software Corp.; and Scott Borduin, vice president and chief technology officer at Autodesk Inc.

Microsoft could also call a string of company officials to testify in its defense, including its chairman, Bill Gates. The company hasn't said when Gates might testify.