Posted on 04/12/2002 8:58:37 AM PDT by Bush2000
WASHINGTON--An economist testifying for nine states seeking tough antitrust sanctions against Microsoft balked on Thursday at supporting one of the key provisions in the states' plan. The states' economist, Carl Shapiro, told U.S. District Judge Colleen Kollar-Kotelly that he could not give an opinion on whether Microsoft should be forced to sell a version of the Windows operating system with some features removed.
This concession came after a Microsoft attorney showed the judge a previous court filing in which Shapiro praised an alternative, mostly cosmetic alteration of Windows, now being offered by the company to settle its antitrust suit.
Shapiro told Kollar-Kotelly that he did not testify about a bare-bones Windows because he didn't have the computer science expertise. "I did not feel I could offer a clear view that could help the court on that provision," Shapiro said. "I think it's a very thorny area."
Shapiro, an economics professor who once worked for the Justice Department's Antitrust Division, called in written testimony for tough sanctions that go beyond correcting actions by Microsoft that were deemed illegal by the courts.
But Microsoft's legal team highlighted his testimony's failure to mention the "modular" Windows proposal that lies at the heart of stiffer sanctions sought by the nine states.
Microsoft attorney, Michael Lacovara hammered away at Shapiro's failure to address this central feature of the states' proposal and his support for hiding consumer access to some Windows features when the original trial court was considering interim remedies short of breaking up the company.
Two years ago, Shapiro offered an opinion to the original trial court that removing end-user access to some of Windows' features struck an "excellent balance" between Microsoft's need to integrate its software and preserving competition.
Windows unplugged
The nine states say Microsoft should be forced to offer a stripped-down version of Windows, with actual computer code removed, to level the playing field for other makers of "middleware" like Internet browsers and media players.
Kollar-Kotelly is still considering whether to accept the proposed settlement of the case reached between Microsoft and the U.S. Justice Department in November.
Shapiro said remedies in the case should "restore competition" in the software business by preventing Microsoft from dominating new technologies that threaten Windows.
"Under these circumstances an effective remedy must be forward-looking and not merely focus on the particular products or technologies that posed a threat (to Windows) five years ago," he said.
The nine states that have rejected the settlement plan are seeking sanctions they say would restrain Microsoft from dominating technologies that have emerged since the landmark antitrust case was filed four years ago.
Microsoft argues remedies in the case cannot go beyond specific wrongdoing upheld by a federal appeals court last year, mainly that Microsoft tried to crush Netscape's Internet browser in an effort to preserve the Windows monopoly.
Shapiro was the 15th witness called by the nine states.
A professor at the University of California at Berkeley, Shapiro served during 1995 and 1996 as the Deputy Assistant Attorney General for Economics under the Clinton administration that brought the case against the software giant.
Competitive threat
Microsoft had killed off a "rare and serious threat" to Windows by crushing Netscape's Navigator browser and hobbling Sun Microsystems' Java programming language, Shapiro said.
"We simply cannot replicate the powerful combination of factors that threatened Microsoft's Windows monopoly six years ago," Shapiro said. "The clear implication: A broader remedy is required to truly restore competition."
He also singled out Web-based services as the most serious threat to the Windows monopoly since 1998, when a federal judge first ruled that Microsoft violated antitrust laws.
Microsoft is developing its .Net services that reside on an Internet server rather than in software on the user's computer. Company officials have said .Net is key to Microsoft's future.
"The clear implication of these trends is that the remedy should place great emphasis on making sure that Microsoft cannot use its Windows monopoly to impede the ability of non-Microsoft servers to compete effectively and to serve up applications to desktops," Shapiro told Kollar-Kotelly.
The nine states still pursuing the case are California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia, plus the District of Columbia.
Microsoft is expected to call its first witness next week in the hearings that are now in their fourth week, but it is not clear who it will be. Both Microsoft Chairman Bill Gates and Chief Executive Steve Ballmer have been listed among the 13 company employees listed as expected witness.
The remedy hearings are expected to run at least through May at their current pace.
Not so much imagination as wishful thinking.
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