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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator -- Ignore unavailable to you. Want to Upgrade?

To: Rusty Johnson who wrote (23368)	5/27/1999 9:52:00 AM
From: Rusty Johnson	Read Replies (2) \| Respond to of 24154

IBM Official to Allege Threats Made by Microsoft About Rivals By JOHN R. WILKE Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- An IBM executive kept a diary detailing alleged threats by Microsoft Corp. to punish the computer maker for promoting competing products, government officials said. Garry Norris, who handled negotiations with Microsoft for International Business Machines Corp.'s personal-computer unit from 1995 through 1997, kept the handwritten, spiral-bound notebook for much of that time, these officials said. The evidence is expected to be produced in the Microsoft antitrust trial, which resumes Tuesday. The evidence from IBM could significantly strengthen the government's case against the software company. Until now, prosecutors have been unable to persuade a major computer maker to testify, with some of them expressing fear of retaliation. IBM's testimony could also help shape any court-imposed remedy, if Microsoft loses. Officials said that Mr. Norris will detail alleged threats by Joachim Kempin, a Microsoft vice president who testified earlier in the trial, to raise the price of Windows software or even withhold it because of IBM's promotion of Lotus Notes and other rival software products. An increase of even $1 or $2 in the per-copy Windows price could cost IBM millions of dollars of profit, while withholding a license to install Windows on new PCs would be devastating. In more than 200 pages of notes and other internal IBM documents that the government will introduce to support his account, Mr. Norris recounts the licensing talks of 1996 and 1997 and the many ways Microsoft is alleged to have pressured IBM. One method was Microsoft's use of secret "market-development agreements," a complex web of discounts that are given to PC makers if they go along with Microsoft's demands, people familiar with Mr. Norris's testimony said. A Microsoft spokesman called the government's claims "demagoguery" and said there was nothing unusual or improper about IBM's licensing talks. "There were tough negotiations on both sides, and I'm sure lots of strong statements made on both sides ... but the bottom line is that Microsoft did license Windows 95 to IBM at a competitive price and IBM continued to ship lots of competitor products right alongside Windows on their machines." The spokesman, Mark Murray, added: "There will be lots of other facts that will come out about the Microsoft-IBM relationship." He indicated that other IBM evidence would back Microsoft's view of the dispute. The emergence of the handwritten IBM notes marks another unexpected turn in the trial, which began last October and has been in recess since late February. During the recess the sides have met and exchanged several proposals to settle the case, but remain far apart; no talks are planned before next Tuesday, people in both camps said. The Justice Department and 19 states charged in a federal lawsuit last May that Microsoft engaged in a pattern of predatory acts to protect a monopoly in operating-system software and extend that dominance to the Internet. That could give the software company a chokehold on Internet access at a time when electronic commerce promises to reshape the economy, the government alleges. The government is expected to begin its rebuttal case next week with more testimony from its chief economic witness, Massachusetts Institute of Technology Professor Franklin Fisher. He will be followed by Mr. Norris, then by Edward Felten, a Princeton University computer scientist who also testified earlier. Prof. Felten underwent more than four hours of combative questioning by a Microsoft lawyer in federal court in Washington Wednesday as part of the company's preparation for the final leg of the trial. Much of the exchange centered on Microsoft's assertion that its Internet Explorer browser is an integral part of Windows and can't be removed without breaking the operating system. The government alleges in its case that the browser was added to Windows to eliminate the threat from a small rival, Netscape Communications Corp. Separately, in a private antitrust lawsuit in Salt Lake City, a federal judge Wednesday expressed skepticism in a pretrial hearing about one of the claims against Microsoft by a small rival, Caldera Inc. The closely held Orem, Utah, software maker alleged, among other things, that Microsoft deliberately preannounced products to hurt competitors, a business tactic known as "vaporware." The judge said he found the evidence on this charge "thin." That suit is expected to go to trial next January.