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To keep the trial moving briskly--the hope is to wrap up in six to eight weeks, compared with the 13 years the IBM antitrust trial dragged on--Judge Jackson has limited each side to 12 witnesses. And he has imposed the unusual condition that all witnesses submit their direct testimony in written form. Only cross-examination and redirect take place in the courtroom.
Despite its difficulty in making the "bundling" argument, Justice has continued to build its case around the Internet browser--the principal software used to navigate the Internet. The government contends that Microsoft has been intent on overtaking Netscape's Navigator because it fears that such browsers may one day be used as an alternative operating system for computers in a way that could make Windows obsolete. Winning the browser war, Boies charged, was Microsoft's way of gaining "a choke hold on the Internet."
The first and only witness during Week One was Netscape CEO James Barksdale. He contended, in 127 pages of direct testimony, that Microsoft systematically "set out to use its vast power as the producer of Windows to 'cut off Netscape's air supply.'" Netscape is a strong case study for the Justice Department because its alleged injuries are clear and dramatic. According to AdKnowledge, Netscape had almost 77% of the browser market in January 1997, compared to Microsoft's Internet Explorer's 20%. By August 1998, Microsoft had 49% to Netscape's 48%.
At the heart of Barksdale's testimony was a June 21, 1995, meeting between Netscape and Microsoft to discuss the Internet browser market. It was at that meeting, Netscape says, that Microsoft crossed the line from aggressive competitor to rapacious monopolist. "It was like a visit by Don Corleone," Netscape co-founder Marc Andreessen recalled later. "I expected to find a bloody computer monitor in my bed the next day." Barksdale charged in his testimony that Microsoft's goal at the meeting was to illegally divide the browser market, keeping the lion's share for itself. "I have never been in a meeting in my 33-year business career in which a competitor had so blatantly implied that we should either stop competing with it or the competitor would kill us," he asserted.
Barksdale's testimony was intended to back up the government's claim that Microsoft engaged in a pattern of "predatory acts" involving many key technology players, including America Online and Compaq. Justice says Microsoft used improper coercion to get these companies to help it crush Netscape. In the case of America Online, the government says, Microsoft refused to put AOL's icon on the Windows desktop unless AOL abandoned Netscape in favor of Internet Explorer. With Compaq, the government says, Microsoft threatened to terminate the company's license for Windows after it dropped Explorer in favor of Navigator.
Justice contends that it was Microsoft's aggressive use of its market power--not the quality of its browser--that accounts for Internet Explorer's rapid growth at Netscape's expense. To make the point, Justice unveiled a memo from Hewlett-Packard complaining that Microsoft had prohibited it from installing Netscape if it wanted to keep installing Windows on its computers. "We are very disappointed," an H-P manager wrote. "From a consumer perspective, it is hurting our industry. If we had another choice of another supplier, based on your actions here, we would take it."