Microsoft fails in bid to halt case

A Microsoft executive testified that his company "absolutely" meant to persuade rival Netscape Communications not to compete against it in a big part of the market for Internet Web browsers, according to testimony cited in a court ruling this week. In a decision rejecting Microsoft's attempt to have government antitrust allegations thrown out, Judge Thomas Penfield Jackson said on Monday that the testimony created a "genuine dispute" about whether Microsoft may have violated the US's antitrust laws.

The testimony concerns a controversial meeting between executives of Netscape and Microsoft on June 21st, 1995. At the time, Netscape Communications manufactured the dominant browser for the Web, Netscape Navigator.

Netscape officials have said for months that Microsoft was trying to get them to allocate markets at the meeting. But Microsoft has denied it. Since then, Microsoft's rival Internet Explorer has captured a large share of the market and is now part of its Windows 98 operating system.

Judge Jackson's ruling characterised the 1995 get-together this way: "Chris Jones, Microsoft's then group manager for Internet Explorer, participated in that meeting," Jackson wrote. "In deposition testimony, Mr Jones indicated that Microsoft `absolutely' intended to persuade Netscape not to compete and offered as a quid pro quo the prospect of Microsoft's staying out of browser development for non-Windows platforms."

While Microsoft declined to comment on the judge's decision, it vehemently denied that it did anything illegal and characterised the get-together as a normal business meeting. To buttress its views, the company released part of Mr Jones's testimony, which it has protected as confidential until now.

Here is the full question from a Justice attorney and the answer by Jones, according to Microsoft:

"Q: Do you recall any discussion about a desire of anybody on the part of Microsoft who was participating to be able to persuade or influence Netscape not to compete with Microsoft?

"A: Absolutely. But again, persuade in the sense of force or persuade in the sense of, hey, we think we can have a great business relationship together. It's the same as my previous one."

Mr Mark Murray of Microsoft said: "We think the facts will show that the meeting was nothing more than a typical meeting between two software companies that develop complementary products to discuss potential business strategies and ways to make sure their products work well together". Based on the limited excerpts of the transcript, Mr Steve Newborn, an antitrust lawyer at Rogers & Wells who worked on the Microsoft case many years ago when he was at the Federal Trade Commission, saw things differently. "If Mr Murray is correct that this is what goes on in Silicon Valley then there are a lot of jail sentences in the offing for a lot of Silicon Valley executives," he said.

Mr Newborn noted that the Sherman antitrust act prohibits market allocation and that companies have paid hundreds of millions of dollars in fines in recent years for violating it.

In his decision on Monday, Judge Jackson set an October 15th date for the antitrust trial.