Microsoft denies it stifled competition

In the first of two days of hearings, Microsoft Corp. told a U.S. appeals court Monday that it did not illegally stifle competitors and that it is not a monopoly. The federal government contends just the opposite, saying Microsoft took anti-competitive steps to control operating system and browser markets.

The seven judge panel for the U.S. Court of Appeals for the District of Columbia bantered back and forth with lawyers representing the federal government and 18 states, as well as representatives of Microsoft with pointed questions about the defense each side used that lead to the decision to breakup of the software giant.

In early questioning, chief Judge Harry Edwards asked Microsoft lawyer Richard Urowsky if his client was free of preventing competition with Netscape and that antitrust law protects competitors. “I think, clearly, the antitrust law protects them (Netscape), but it doesn’t protect them from competition,” Urowsky answered.

In a key argument of whether copyright law should outweigh antitrust law and protect Microsoft from having to alter Windows in order to foster competition, Urowsky was unable to prove his point. In support of not having to modify Windows for competitors to more easily ‘link’ browsers to its operating system, Microsoft cited a 1976 case supporting the right of the Monty Python comedy troupe in preventing changes to their works. But Judge Douglas Ginsburg questioned the point, and Judge David Tatel added, “I don’t see how you can get a reversal on this part of your case.”

Urowsky got some support from Judge Raymond Randolph, who asked, “What if Microsoft thought that Navigator could threaten Windows? Why isn’t that enough” to compete aggressively? “I think it is enough,” Urowsky responded. “If Navigator is perceived as a potentially strong competitor.”

Urowsky said Netscape was not hurt by Microsoft and showed evidence of Netscape increasing its market share from 1996 to 1998 from 15 to 33 million. “Millions of people chose to use Navigator despite” the fact rival Explorer was included with Windows, he said. “Netscape had unfettered access to consumers.”

The federal government came under hard review as well, with Justice Department lawyer Jeffrey Minear having to defend his claim Microsoft used its power to stifle competition.

Minear argued that Microsoft spent millions to promote its Internet Explorer browser and crush its competition in the process. Judge Edwards asked Minear if Netscape had the intention of competing with Microsoft in areas other than browsers. “I believe there is a mixture of evidence about Netscape’s plans,” Minear said. “You’ve got to do better than that,” Judge Edwards responded, claiming there was no concrete evidence that Netscape considered itself a challenge to Microsoft.

The Justice Department, 18 states and the District of Columbia sued Microsoft, contending that the company violated federal antitrust law by using illegal methods to protect its monopoly. Last June, U.S. District Judge Thomas Penfield Jackson ordered Microsoft be split in two. He ruled two months after concluding that Microsoft violated antitrust laws by using illegal methods to protect its monopoly in computer operating systems, stifling competition. He also said the company tried illegally to expand its dominance into the market for Internet browsers.

Today, matters will focus on Microsoft’s contention that Judge Jackson showed bias in remarks to reporters and book authors by attacking Microsoft Chairman Bill Gates, the company’s legal team and the appeals court.