www.internetnews.com/bus-news/article.php/3328871
By Jim Wagner and Susan Kuchinskas March 19, 2004 Microsoft's Argument Inspected
"Going back to 1988, the industry was in its infancy," said Yankee Group analyst Laura Didio. "A lot of engineers simply did not have enough experience or know-how to fix these problems." In that era, according to Didio, "Integration between disparate software platforms ranged from barely adequate to extremely poor and unworkable. What you're reading in these memos was widely practiced by vendors at the time, including Microsoft competitors." Rob Helm, an analyst with Directions on Microsoft, said that the recently leaked Windows source code gives some insight into Microsoft's constant scramble to support third-party applications. "There were a lot of comments on the order of, 'We had to do this because otherwise someone else's app won't work right,'" he said pointing out that the e-mails aren't necessarily a smoking gun. They may, however, indicate that the developers couldn't or didn't have time to fix all incompatibility problems. To give some objective perspective, Dan Galorath, a computer consultant in El Segundo, Calif., was responsible for deciding between MS DOS 2.0 and CP/M as the operating system for an IBM PC clone that Commodore planned but never built. Galorath told internetnews.com he jchose MS DOS for two reasons. "I thought it was better to stick with what IBM was using, and MS-Dos version 2 had sub-directories, which just blew the doors off CP/M 86 in my opinion," he said. Galorath met with both companies before making the decision, and found them to be similar in their sales methods -- or lack thereof. "There were a bunch of techies at both companies," he said, adding that there was no pressure, no wining and dining. "I was a technical guy out there with technical people making an operating system decision." The state will have to prove that if Microsoft hadn't taken exclusionary actions, there would be more competition today in the operating system market, said Allan Van Fleet, co-head of the antitrust practice group at the Houston law firm Vinson & Elkins. "If you get a monopoly because you honestly have the best product or service, it's not a crime to charge whatever you can for it," he said. The measure of damages if Microsoft loses will be what end-users actually paid for Windows licenses versus what that price would have been in a competitive market, Van Fleet said. "You have to guess and hypothesize about what that market would be like." Legal Woes Winding Down
Despite the many state-level settlements -- including his own firm's role in the California decision -- Rick Hagstrom, the lead attorney representing the plaintiff in Minnesota, thinks he has enough evidence on hand to win the case. He told internetnews.com the firm wouldn't have taken the case if they weren't confident of the results. "Microsoft's position is, 'Well, we apologize for violating the law, but we didn't hurt anybody,'" he said. "And, of course, our position is why would Microsoft risk the consequences of violating the antitrust law if they didn't do it to hold prices higher so they could reap monopoly profits?" "That's the question jurors will answer," he added. Testifying next week in Minneapolis will be Jerry Kaplan, former co-founder and chairman of GO Corp., developers of a pen-based operating system that plaintiff lawyers maintain is "virtually" identical to Microsoft's existing pen-based OS. His live testimony will lead off a week of video depositions jurors will use to determine whether Microsoft is guilty of inflating software prices and stifling software innovation, to the detriment of Minnesota residents who paid for Window OS or Microsoft Office. Microsoft is expected to present its side of the case in mid-April. Lawyers for the company have unsuccessfully attempted to throw the case out of court for the past couple of years, going all the way to the state Supreme Court, which ultimately decided to uphold the lower court's decision to certify the case as an antitrust issue. Microsoft executives did not respond to requests for comment. p These actions are going on in state courts, according to Van Fleet, because federal jurisprudence doesn't allow indirect purchasers to sue manufacturers. Since computer users buy Windows in a bundle with the PC, they're indirect purchasers under federal rules, but a number of states allow indirect purchasers to sue for damages. According to news reports, Microsoft defense lawyers were able to throw out 38 other state class action suits in 2001 because of the Illinois Brick precedent, which bars lawsuits from people who indirectly buy the product; in this case, individuals who purchase PCs with pre-installed Windows or Word applications. Minnesota's Appeals and Supreme Courts obviously didn't agree with the precedent, although the Gordon et al. v. Microsoft case represents just such indirect software purchasers.
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