Inducements to Netscape confirmed

Microsoft's Rosen is cross-examined

February 24, 1999|By BLOOMBERG NEWS

WASHINGTON -- A Microsoft Corp. executive testified yesterday at the company's antitrust trial that the software giant offered inducements to Netscape Communications Corp. in mid-1995 intended to head off competition in the market for Internet browsers.

Under cross-examination at the company's antitrust trial today, Microsoft executive Dan Rosen said, "I think it's fair to say we offered [Netscape officials] several inducements if they would adopt the four technologies we talked about earlier."

The technologies would have forced Netscape to rely on Microsoft's Windows operating system to build an Internet browser -- eliminating Netscape's Navigator browser as a competitive threat. Windows runs more than 90 percent of the world's personal computers.

The government alleges that Microsoft offered to help Netscape with its fledgling computer-server business if the smaller company would agree not use its Web browser as a rival to Windows. The U.S. Justice Department and 19 states contend that Microsoft illegally tried to protect its monopoly control of the computer operating system market by subverting competitors.

When Netscape refused, the government says, the world's largest software maker restricted distribution channels for Navigator. Microsoft denies the charge, saying Netscape is still free to distribute its browser via the Internet.

Yesterday's testimony by Rosen, Microsoft's general manager for new technologies, lent credence to at least part of the government's case. In earlier questioning by Microsoft attorney Michael Lacovara, Rosen said a key June 21, 1995, meeting with Netscape was designed to explore the company's plans for its browser and convince the company to base its product on Microsoft's technology.

Microsoft continued to provide "significant support" to Netscape, even though it agreed to adopt only one of the four technologies suggested by Microsoft, Rosen said.

Rosen testified that Microsoft didn't view Internet browsers as a competitive threat, contradicting his own earlier words and those of Chairman Bill Gates and other company executives.

Rosen testified that he didn't see Internet browsers, in particular Netscape's Navigator, as a threat in mid-1995 to Windows. He also said he was "not certain" that Microsoft and Netscape engaged in a well-documented three-year battle for leadership in the market for Internet browsers.

Under cross-examination by lead government lawyer David Boies, Rosen argued that an e-mail he wrote about the threat hadn't been sent and contained statements he didn't think were true at the time. Later, Boies showed that, in fact, the e-mail had been sent.

Yesterday, Boies challenged Rosen's recollection that he'd first seen a version of Netscape's browser after the June 1995 meeting. "You don't remember that, do you, sir? You're just making that up right now," said Boies, raising his voice.

Rosen at first denied it, then conceded, "I stand corrected," after Boies showed him an April 27 e-mail suggesting that he had seen the browser earlier.

Pub Date: 2/24/99

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