2 at Intel differ on Microsoft's role Software giant killed venture, one says

2nd calls cut unforced

Computers

November 11, 1998|By COX NEWS SERVICE

WASHINGTON -- Testimony from two senior Intel Corp. executives differed sharply yesterday at the Microsoft antitrust trial on whether the software giant had misused its monopoly power to shut down Intel's own software venture.

Under cross-examination, Intel Corp. Vice President Steven McGeady said, "We had a fear that if we revealed our [software] program too early to them, Microsoft would bad-mouth the project to [computer makers]. The fear we had was ultimately realized when they stomped it out of existence."

McGeady was referring to native signal processing, or NSP, which Intel had developed to speed up multimedia displays on personal computers.

But Microsoft Corp. attorneys sought to undermine McGeady's testimony by showing a pretrial videotape of his boss, Ron Whittier.

NSP was scrubbed in the summer of 1995, Whittier said in the taped deposition, primarily because Microsoft was ready to release Windows 95 and NSP could then improve only Windows 3.1, the previous operating system.

The issue is important because the government is seeking to show that Microsoft Corp. has behaved in a predatory manner toward many high-technology companies, including Intel, the world's foremost producer of microprocessors, the digital brain of all personal computers.

In court, Microsoft sought to portray Intel as the bad actor and Microsoft as the victim.

"Is it not a common pattern, Mr. McGeady, for Intel to deny technology to companies it seeks to punish?" boomed Microsoft lawyer Steven Holly.

"Absolutely not," McGeady shot back.

Holly: "If you did that to Microsoft you would be shooting yourself in the foot?"

McGeady: "That would be one characterization."

McGeady explained, "we had some help from Microsoft as to what our best interests were." Citing the testimony by Whittier, the government's witness said: "The emphasis he gives it is PR spin."

"At his deposition?" Holly asked incredulously.

"Yes," McGeady replied.

McGeady also cited Intel founder Andrew Grove, who said two years ago that Intel had bowed to Microsoft's industry power when it decided in 1995 to abandon work on NSP.

"We didn't have much of a choice. We basically caved," Grove told Fortune magazine in July 1996 during a joint interview with Microsoft Chairman Bill Gates. "We caved. Introducing a Windows-based software initiative that Microsoft doesn't support, well, life is too short for that."

In its dealings with Intel, Microsoft would typically pledge in vague terms to incorporate the chip maker's latest innovations -- but only for software releases still far down the road, McGeady testified.

Microsoft's strategy, McGeady said, amounted to, "I'll pay you tomorrow for a hamburger today."

Not content with scuttling NSP, Microsoft also wanted to "Balkanize" the World Wide Web so that competitors' browsers would no longer be able to view all Web pages, McGeady held.

In his handwritten notes, he quoted top Microsoft officials as saying in 1995 that they planned to use their clout to "kill" the universal Web language, known as HTML, by extending it in a proprietary way, thereby undermining the Internet's basic page-viewing technology.

Yesterday's testimony also showed Gates to be a poor legal prognosticator, telling Intel executives in 1995 that "this antitrust thing will blow over," and adding: "We haven't changed our business practices at all."

Pub Date: 11/11/98

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