US demands Microsoft breakup

Attorneys argue Microsoft more interested in protecting its monopoly than creating innovative products.

Hoping to convince Federal Judge Thomas Penfield Jackson that Microsoft is trying to protect its monopoly rather than please customers, US Department of Justice attorneys summed up their case during closing arguments in the Microsoft antitrust trial Tuesday.

Microsoft presented its side of the case Tuesday afternoon.

Presenting first for the DOJ, Steve Houck, senior counsel in the New York State Attorney General's Office, asked the judge to define the market for the purposes of the case as the Intel-based PC operating system market. He then pulled out a previously submitted document showing that Microsoft has had more than a 90 percent share of that market since 1991 -- an indication, he said, that the company was a monopolist. "And there is no end in sight," Houck told the judge. "Microsoft has maintained an unshakeable stranglehold on the market for PC operating system software."

Houck said no company has been able to make even a dent in that market because of high barriers to entry. He said even Microsoft's own witnesses have supported that view, including a Compaq executive and an economist who testified that no commercially viable alternatives to Windows exist at this time.

As a result of its monopoly, Houck said the company had been able to keep its prices artificially high. In addition, Houck urged the judge to look at the credibility of Microsoft CEO Bill Gates -- who appeared only via videotaped deposition -- and to question why he never testified in person.

The government must convince the judge that Microsoft not only has a monopoly, but that it illegally leveraged its market dominance to move into other markets. Lead DOJ attorney David Boies set out to do that later in the morning, revisiting dozens of documents -- including some of Microsoft's own internal memos -- in an attempt to show that Microsoft acted only to protect its monopoly, not to improve Windows. "This is not a situation, your honour, of a sleepy monopoly. This is a monopolist that's very vigilant at protecting its monopoly power," Boies said.

Boies said Microsoft acted illegally by, among other things, tying the browser to the Windows, restricting computer makers from changing the boot-up screens, and requiring ISPs, content providers and companies such as Apple Computer and Intel to promote its browser while limiting the distribution of Netscape's rival browser.

In an attempt to prove his point, Boies ran through a series of previously submitted exhibits, including some that suggested Microsoft tried to divide the browser market with Netscape and others that suggested Microsoft sought to "control" the Web browser market at all costs. "Their intent is not to promote Windows, but to use Windows, to use the monopoly power of Windows to stifle competition," Boies told the judge.

Boies spent much of his allotted time addressing the browser issue, which originally sparked the antitrust case last year. But he also pointed to documents showing that Microsoft tried to crush other threats to its desktop dominance, including Java and multimedia software developed by Intel. Such moves, DOJ attorneys said, not only cost consumers millions of dollars, but they also prevented them from having access to innovative technology because Microsoft had quashed it.

Judge Jackson is expected to issue a series of ruling on these issues in the coming months, but the case is could be tied up in appeals for years after that.

Take me to the DoJ/Microsoft special.