By Nick Patience
Does Microsoft Corp think the judge will not rule against it? Is it in denial, or does it think the antitrust trial is a big joke? Or has it already secretly conceded defeat? Which ever one it is -and it could be a combination – the company does not seem to be taking the threat of some sort of censure or even worse, surgery, particularly seriously, judging from its efforts at the trial in Washington last week. Microsoft’s highly-paid lawyers do not seem to have prepared their witnesses terribly well, leaving them blurting out damning admissions on the witness stand almost hourly. Most observers felt the company had a bad week last week, especially with Cameron Myhrvold and Brad Chase appearing to admit under oath that Microsoft restricted distribution of Netscape Navigator by ISPs and America Online. That kind of thing is okay, but not if you effectively own the market for the operating systems on which 90% of the world’s personal computers run. And no amount of tired Coca-Cola analogies – Coke has an exclusive deal with McDonalds preventing Pepsi getting a look in – will help. Coke is not a monopoly and it is not trying to sell the burgers and the machines to cook them with to McDonalds as well – with the stipulation that McDonalds has to take the machines if it wants to sell the drink. It just wants them to sell the Coke. So let’s not hear any more about Coke, please. Being in denial could be the root of Microsoft’s problem. Microsoft repeated numerous times last week that this is all water under the bridge and you can’t keep dragging up the past to try and predict what might happen in the future. Well guys, if that were true then you could never accuse anyone of anything. As one of the Justice Department’s lawyers told us last week, it’s like saying well yes, I shot the guy, but in my defense, that was ages ago and he was going to die anyway, so can’t we just move on? With Brad Chase getting mauled by lead government attorney David Boies over Microsoft’s agreement with AOL, Microsoft chief counsel Bill Neukom said on Thursday lunchtime, that distribution is the deadest herring in this controversy. He said the government is trying to forecast some future problem based on a rear-view mirror version of the facts…what’s in the rear-view mirror is irrelevant. Err, no it isn’t Bill, at least according to US law. As the DoJ lawyer says, even though technology is developing at a breathtaking pace, we haven’t devised a way of trying people for crimes they are going to commit in the future, or even trying them in real time. So for now at least, US antitrust law will have to make do with past actions. But, counters Microsoft, the company has ceased many of the practices to which the DoJ objected, in particular requiring ISPs to distribute IE on its own and only permitting them to supply Navigator to users that specifically asked for it, which it stopped doing last April. So why doesn’t the DoJ just leave the company alone? As David Boies said on Tuesday lunchtime, if you catch somebody doing something that was wrong and they stop doing it, it doesn’t mean that it wasn’t wrong.
Paper trail to Gates
The key witness last week was arguably Myhrvold. He negotiated the company’s agreements with the ISPs and admitted under questioning that Microsoft had forced ISPs to ship IE on its own because the company was worried that if they shipped Navigator alongside, users would opt for that, such was Netscape’s popularity at the time in question, 1996-97. It was quite something to see Microsoft admitting as such under oath, especially with Myhrvold saying yes, this is how it is, and here’s a paper trail leading all the way back to Bill Gates. Although Myhrvold appears to be a fairly jolly person by nature, we’re not sure if his regular grinning and laughing on the witness stand was from that, or was an indication of a nervousness, or a representation of the lack of seriousness or even arrogance that Microsoft appears to be attaching to the antitrust trial. He had every right to be nervous, because it appeared that he was completely unprepared for the questioning he received from Boies. It was all too easy for Boies. At one point, he had Myhrvold doubled over with laughter when, after pausing before answering what he thought was a trick question from Boies, the government lawyer said he would in future indicate if it was a trick question by raising his right hand before asking it – and then demonstrated the technique. Brad Chase sat through most of last weeks’ testimony before taking the stand himself on Thursday morning. He seemed to have learned from Myhrvold’s mistakes and didn’t get sucked in, for example, to Boies habit of asking an often devastating trio of questions about numbers. In trying to show that there are so many AOL keywords users couldn’t possibly remember the one they need to find Netscape’s browser within AOL without prompting, he asked Chase how many AOL keywords there are. Chase said he didn’t remember. Approximately? asked Boies. I really don’t remember, said Chase. Can you give me a range? asked Boies. Not really, said Chase and Boies moved on. Myhrvold and other witnesses having been sucked into offering a range of numbers – often user numbers or market share data – and then being painted into a corner by Boies about those numbers. Rather like a comic actor trying to make the transition to serious roles but not quite succeeding, Microsoft seems to have underestimated the gravity of the situation in the Washington court, in much the same way it could not get itself taken seriously in political circles in Washington until very recently – some would argue that it still has not made that particular leap. But with six of the 12 Microsoft witnesses having been and gone and with just a couple of weeks left of the witness stage of the trial, it is probably too late now to learn how to perfect Washington power games and save Microsoft from some sort of censure by Judge Thomas Jackson.
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