Microsoft on Trial: Intuit's CEO calls for 'OS neutrality'

Calling for the government to impose "operating system neutrality" to ensure fair and free industry competition, Intuit Inc.'s top executive lambasted Microsoft Corp. for its business practices.

In a summary of his 50-page testimony in the Microsoft antitrust case, company chairman and CEO William Harris urged the government to enforce the provisions outlined in the 1995 consent decree. "With the growth of the Internet, I believe it is now important that the operating system [and its extensions, the browser and the [Microsoft] Start page] be neutral not only with respect to applications, but also with respect to Internet-based content and services," says Harris, in describing his suggested "neutrality" remedy.

Intuit released the excerpts several hours ahead of the government, which puts witness testimony on its Web site ahead of their appearances in court. Microsoft called Harris' "operating system neutrality" suggestion "an entirely new and irrelevant concept Mr. Harris cooked up on his own." Microsoft posted its rebuttal to Harris' testimony on its own Web site earlier this morning.

Microsoft took issue with nearly all of Harris' points. "Of the nearly 50 pages of Mr. Harris' testimony, only 16 pages address relevant interactions with Microsoft; the rest is speculation or half-baked analyses," according to the Microsoft statement. Microsoft objected most vehemently to Harris' claim that the giant software company threatened to fold elements of Microsoft Money into Windows. That project, code-named WinATM, helped convince Intuit to agree to Microsoft's attempt to acquire Intuit in 1994.

Harris said Microsoft approached two financial kingpins, CheckFree and MasterCard International, with the idea of bundling WinATM into the operating system "so that it would be universally and freely available and be the default option for personal finance and online banking and payment activities for all users of the Windows operating system."

Microsoft, for its part, claimed WinATM was a project that never got off the drawing board. Microsoft said that its advanced Internet Explorer functionality - such as its modularisation capability - is why Intuit was interested in a merger, and once that failed, in an exclusive deal with Microsoft that resulted in Intuit dropping all business relationships with Microsoft rival Netscape Communications Corp.

The bundling of IE isn't Intuit's only bone of contention. Harris discusses in his testimony the ramifications for all software developers of Microsoft's Active Desktop user interface design, with its predesignated channels, as well as of the possible anti-competitive effects of Microsoft's tying to Windows of its Microsoft Start portal page.

"Because Microsoft owns the dominant operating system, Microsoft also controls the premier distribution mechanism for any software application, which is distribution with the operating system itself," Harris contends. "With this unique method of distribution, Microsoft has the unparalleled power to favour one product over another by tying competitive products to the operating system, as it has done by distributing Internet Explorer with each copy of Windows."

Harris is slated to appear in U.S. District Court starting Jan. 4, when the DoJ antitrust trial resumes. He is the eleventh government witness. Microsoft is expected to begin calling its own witnesses later in January.

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