Bill Gates Warns Judge About States' Antitrust Plan

Reuters.com ^ | 22 April 2002 | Reuters, unspecified author

[Joe Bonforte]

WASHINGTON (Reuters) - Microsoft Corp. Chairman Bill Gates took the witness stand on Monday, telling a federal judge that antitrust sanctions sought by nine states would cripple Microsoft and set its Windows operating system back 10 years, to the detriment of consumers and the computer industry.

Appearing in person for the first time in Microsoft's four-year antitrust battle, Gates warned U.S. District Judge Colleen Kollar-Kotelly of dire consequences if the judge accepts suggestions that include a version of Windows that can be customized by computer makers and rival software designers.

Gates said the nine states threaten Windows' existence as a stable platform that allows a wide range of computer hardware and software to work together, and would deny Microsoft the incentive to make continual improvements.

"The (states' ideas) would undermine all three elements of Microsoft's success, causing great damage to Microsoft, other companies that build upon Microsoft's products, and the businesses and consumers that use PC software," the world's richest man said in his 155-page written submission.

Some legal analysts have said Gates' failure to take the stand at the original trial damaged the company's defense. The Justice Department, instead, showed unflattering portions of a videotaped pretrial interview in which Gates appeared uncooperative and quibbled over the meaning of common words.

The nine states still pursuing the case have refused to sign on to a proposed settlement of the case reached between Microsoft and the Justice Department in November.

Appearing as Microsoft's seventh witness at the remedy hearings, Gates credited Microsoft's Windows monopoly with having helped to unite a fragmented personal computer industry.

"By reducing Windows to some undefined 'core operating system' the (states) would turn back the clock on Windows development by about ten years and effectively freeze it there," he said.

Gates said the company's new .NET strategy for Internet-based services would spark a new round of opportunities in the computer industry, contradicting some witnesses for the states who feared Microsoft would use its Windows monopoly to dominate this emerging technology.

The demands of the non-settling states are technically impossible, Gates said. And he dismissed the idea that Windows' could function properly with add-on features, known as "middleware," that were easily added and removed.

"There is no clear dividing line between where a particular block of "middleware" ends and the rest of the operating system begins," Gates said.

[Joe Bonforte]

I still believe the Gang of Nine will not affect the outcome of this case. The judge may make modifications to the settlement worked out by Justice and Microsoft, but I doubt they will be huge.

[hchutch]

I hope you are right. Quite frankly, what standing do those nine states and DC have? IIRC, interstate commerce is regulated by Congress/the federal government. I fail to see what gives these nine states the right to scuttle the deal.

None of these states should have been involved, IMHO. It should have been between DOJ and Microsoft. Once that was done, the settlement would be between them, with no states involved in it.

[hchutch]

FYI

[Fish out of Water]

index bump

[Vineyard]

good solution would be for Microsoft to advise that all Windows Operating systems won't be sold in the 9 states, and that the product, if bought elsewhere and brought into the state would be considered a "gray market" product, and no warranty or service would be provided on the product!

Mike

[Jumper]

Nine States remaining, nine democrat govoners? Of the original 19 states in this antitrust suit against Microsoft, I beleive only one had a Republican Govoner; Of the 50 States, 31 had Republican Govoners. I ask you, entirely accurate or not, if the majority of the democrat govoners were involved with the democrat DOJ and Clinton Administration - it is "heir" apparant that the republicans will set this right.

This was a democratic party lawsuit against Big Business if I've ever seen it!

Enron is payback!

[PrescottBush]

Gates should pull a John Galt, take his stuff, disappear and watch the chaos from his secret mountain hideaway.

[Lurking Libertarian]

Quite frankly, what standing do those nine states and DC have? IIRC, interstate commerce is regulated by Congress/the federal government. I fail to see what gives these nine states the right to scuttle the deal. None of these states should have been involved, IMHO. It should have been between DOJ and Microsoft.

Congress, in its infinite wisdom, put a provision into the antitrust laws authorizing State Attorneys General to sue for violations of the antitrust laws which harmed citizens of their states.

The judge in this case actually asked the DOJ if they thought the states had a right to push the case after the DOJ settled; the DOJ response was "we don't agree with the states' position but we agree that they have the right to be in the case and take that position."

[AFreeBird]

good solution would be for Microsoft to advise that all Windows Operating systems won't be sold in the 9 states, and that the product, if bought elsewhere and brought into the state would be considered a "gray market" product, and no warranty or service would be provided on the product!

Fine, then the M$ EULA would be equally void as well.

This is where we hear the sky is falling, chicken little sayings from M$.

[hchutch]

Well, it seems to run afoul of the Commerce Clause, IMHO.

[Poohbah]

No, Bill should merely announce that he's pulling a wall-to-wall license check on the state governments in question.

He would probably recoup more cash from the license check (governments are the WORST software pirates in the world) than he'd pay out in fines.

[Poohbah]

Actually, in that case, NO MS software in that state would be legal, and Bill could demand stiff penalties from any software pirates selling or using said software.

[hchutch]

IIRC, the DOD had a real mess over a pirated copy of Solaris a while back. REALLY irritated SECDEF Cohen.

[Poohbah]

Yup, you are never allowed to pirate software from your big campaign donors, just from recalcitrant folks like Microsoft.

[hchutch]

It would be interesting to see how fast those hold-out states would come to the table if Microsoft ran those "random" license checks. I have a feeling they would be VERY conciliatory.

[azhenfud]

Wonder if the states involved would feel the same if Bill were to revoke their rights to access or use any of HIS copyrighted software? Afterall, he does reserve and retain all copyright priviledges allowed by law, and revocation priviledges is still one of those rights....
Az

[Random Access]

Gates should pull a John Galt, take his stuff, disappear and watch the chaos from his secret mountain hideaway.

I understand Bill Gates and many of his senior execs are learning to speak Canadian.

[Indrid Cold]

Yeah, if we could find a corporation with huevos, that's exactly what would happen. Unfortunately corps tend to blunder onward, naively thinking that the fedgov will cut them a square deal. Ask RJ Reynolds how well this strategy worked.

[Temple Owl]

But remember, Gates is a left-wing, liberal Democrat who backs the RATS with big money. What goes round.....

[usconservative]

Gates should pull a John Galt, take his stuff, disappear and watch the chaos from his secret mountain hideaway.

So many times, I've made that very statement myself. Pick up the company, move to an Island (or better yet, Canada) where Gates & Co. can thumb their noses at the US Government, and tell 'em in no uncertain terms to "stick it" where the sun doesn't shine.

Of course, they'd light all the buildings they own in Redmond on fire first, then leave!

Oh for a real John Galt to emerge....