Microsoft Said to Enhance PC Influence in Settlement
The New York Times
March 26, 2002
By REUTERS
WASHINGTON, March 25
(Reuters) - The
government's proposed antitrust
settlement with Microsoft
has allowed the
company to impose onerous new
licensing terms on computer
makers, a lawyer with Gateway
Inc. ) testified today.
The lawyer, Anthony Fama, who
is Gateway's group counsel, also
told Judge Colleen Kollar-Kotelly
of Federal District Court here
that new uniform Microsoft
discounts, based on volume,
appeared to be structured in a
way that continues to favor
cooperative computer makers.
Mr. Fama was called as a witness by nine states seeking
tougher sanctions against Microsoft than the Justice
Department has proposed.
He said the new licensing terms for Microsoft's dominant
Windows desktop computer operating system had
worsened provisions that Gateway had already found
objectionable in previous agreements.
"Microsoft has gained additional control over Gateway in
the guise of a remedy," Mr. Fama said in written
testimony.
The settlement reached in November between Microsoft
and the Justice Department aims to give computer
makers greater freedom to feature rival software and
requires standard licensing and pricing of Windows to
reduce the ability of Microsoft to influence computer
makers' software choices.
Microsoft adopted the terms of the settlement in
December, even though Judge Kollar-Kotelly is still
weighing whether to endorse the pact under a separate
proceeding.
The judge denied a Microsoft motion today to throw out
parts of Mr. Fama's testimony. Microsoft had argued that,
like many of the states' previous witnesses, Mr. Fama was
discussing issues beyond the scope of the case.
Microsoft also issued a statement saying that "avoiding
special concessions was precisely the point" of the
settlement agreement.
But Mr. Fama said the volume discounts under the
settlement gave the highest advantage to Dell Computer
(news/quote) and Compaq Computer (news/quote). These
companies, he said, were found "more compliant" with
Microsoft in the original trial court's findings of fact.
Mr. Fama testified after Michael Tiemann, chief
technology officer for Red Hat Inc., who said last week that
attempts to preinstall the Linux operating system on
computers had foundered because the computer makers
feared that Microsoft would retaliate.
Microsoft spent much of today arguing that Red Hat had
failed to popularize Linux because of Red Hat's own
shortcomings, rather than interference from Microsoft.
Red Hat spent little money on research and development
and dedicated few of its employees to winning over
software developers to write programs for Linux, said
Stephanie Wheeler, a Microsoft lawyer.
Mr. Fama of Gateway said Microsoft had "incredible
power" over computer makers and could still intimidate
computer makers under the proposed settlement.
Nine states, including California, Connecticut and
Massachusetts, as well as the District of Columbia, are
seeking remedies stricter than those accepted by the
Justice Department and Microsoft. The hearings on their
request are expected to last several weeks.
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