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February 17, 1999


By CBR Staff Writer

America Online Inc was accused yesterday at the antitrust trial in Washington, of not opting out of part of its browser deal with Microsoft Corp in favor of Netscape because to do so would have weakened the government’s case against Redmond. Brad Chase, finishing his time in court with a flourish, said that there were two reasons why AOL did not pull out of its marketing and promotion agreement with Microsoft, as it could have done at the end of last year. The first was that Netscape Communications Corp had still not produced a componentized browser suitable for integration with AOL’s client software. Chase said that the second reason was because to do so would have meant that overall market browser share would tip heavily in Netscape’s favor. Which, in Chase’s words, would be, inconsistent with AOL’s position as someone who wants to support the government in this case. Chase went on to state that he thought AOL would move to using Netscape technology in time, because they spent $7bn on Netscape – they will switch. Microsoft counsel John Warden produced the SEC filing made by Sun Microsystems at the time of the AOL/Netscape/Sun alliance. The document stated that the companies would work together on a set of Java services that would work well in the AOL environment, which Chase took to mean that the services would allow communication with set-top boxes and other small wireless devices. The filing also listed the firm’s intention to work together on a basic browser to compete with the browser component of Internet Explorer – suitable for use in the AOL client software. Chase said that the document backed up his contention that AOL intended to move to Netscape software. Outside on the courthouse steps, the Department of Justice’s lead attorney, David Boies, dismissed the issue as irrelevant because Netscape did not have a monopoly operating system to integrate their browser software with. He also pointed out the importance that AOL gave to its place on the Windows desktop and cited this as a reason why the company did not opt out of its agreement with Microsoft.

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