The Justice Department (DOJ) and 19 states claim the world's largest software maker sought to curb distribution of Netscape's Web browser to bolster its own Internet Explorer browser and illegally protect from competition its ubiquitous Windows operating system monopoly.
The antitrust trial is in recess today.
In pretrial testimony released this week, Microsoft software developer Joe Belfiore lent support to the government's argument that, because downloading browser programs is cumbersome, few consumers get Navigator from the Internet.
"There's tons of feedback that suggests that downloading IE takes too long, is too hard," Belfiore said. "Is that something that applies to the latest version of Netscape's Communicator as well as IE?" Belfiore was asked by Justice Department attorney Phillip Malone. (Communicator is another version of the Navigator browser.)
"Yes," he replied.
In addition to arguing that the Internet is not a viable channel for distributing browsers, antitrust enforcers say that the most effective way to distribute software is to load it on personal computers before they are sold. They claim Microsoft kept Netscape from taking advantage of that method by requiring computer makers to install on their products a version of Windows that included Internet Explorer.
The government charges Microsoft deliberately "welded" Internet Explorer to Windows to take away any incentive for computer manufacturers to install Navigator.
Microsoft saw Navigator and other Internet technologies as threats to its operating system dominance because browsers can run different kinds of software the same way an operating system does, the government argues. Windows runs more than 90 percent of the world's computers.
Difficulty downloading
Belfiore's testimony was taken by antitrust enforcers before Microsoft was sued in May. At the trial, the government produced a 1997 Microsoft email quoting marketing research data that said "66 percent of everybody on the Web has never downloaded a browser."
Microsoft's lead defense witness, economist Richard Schmalensee, testified that Netscape distributed more than 100 million copies of Navigator in 1997 through a variety of channels, including the Internet.
"I simply do not understand how there is an argument that there was foreclosure from distribution," he said.
Microsoft says that, even if most computer consumers buy machines loaded with Internet Explorer, other browser manufacturers can still distribute their product over the Internet, or through mass mailings.
David Farber, a University of Pennsylvania computer scientist, testified that he gave up trying to download Netscape because it took too long.
Rob Bennett, a group product manager for Microsoft, said that the Internet "is one or our key distribution channels" for Internet Explorer. Microsoft is expending "significant amounts of development time and research" making it easier to download, he said.
Greater ease
Internet Explorer 5, due out this quarter, will give computer users the ability to download the program with greater ease, Bennett said. He added that consumer complaints about the difficulty downloading Internet Explorer shows that "people are actually downloading."
In testimony released today, Microsoft vice president Paul Maritz said high-speed transmission technology will soon make it even easier for PC users to download large programs from the Internet (See related story). Such innovations "will change the very nature of how software is obtained by customers in the first place."
"Customers may purchase a personal computer with very little software pre-installed on it, take it home, plug it into a telephone line or cable-TV outlet and have the bulk of the very latest operating system and application software downloaded onto it?and then updated frequently and automatically," Maritz said.
Companies like America Online, which is seeking to buy Netscape for $4.2 billion, "is in a strong position to determine which software is available to consumers," he said.
Microsoft, meanwhile, was given access to the documents AOL and Sun Microsystems signed to form a technology and marketing partnership. The companies worked out the disclosure procedures, approved by U.S. District Judge Thomas Penfield Jackson, after Microsoft argued the information would show the alliance would have an impact on the outcome of its antitrust case.
The alliance was agreed to at the same time AOL announced plans to acquire Netscape. The Justice Department is reviewing the proposed $4.2 billion AOL-Netscape combination.
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