:
MICROSOFT CORPORATION, ET AL. :
6 DEFENDANTS :
__________________________________________:
7 STATE OF NEW YORK, ET AL. :
PLAINTIFFS :
8 :
VS. : C. A. NO. 98-1233
9 :
MICROSOFT CORPORATION, ET AL. :
10 DEFENDANTS :
__________________________________________
11 WASHINGTON, D. C.
OCTOBER 20, 1998
12 (A. M. SESSION)
13 TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE THOMAS P. JACKSON
COURT REPORTER: PHYLLIS MERANA
20 6816 U. S. COURTHOUSE
3RD & CONSTITUTION AVE., N.W.
21 WASHINGTON, D. C.
281-6648
2 - [add a note]
FOR THE UNITED STATES: PHILLIP MALONE, ESQ.
2 DAVID BOIES, ESQ.,
U. S. DEPT. OF JUSTICE
3 ANTITRUST DIVISION
SAN FRANCISCO, CA.
4
FOR THE DEFENDANT: JOHN WARDEN, ESQ.,
RICHARD J. UROWSKY, ESQ.,
STEVEN L. HOLLEY, ESQ.,
RICHARD PEPPERMAN, ESQ.
SULLIVAN & CROMWELL
7 125 BROAD STREET
NEW YORK, NEW YORK
8
FOR THE STATE OF NEW YORK: STEPHEN HOUCK, ESQ.,
ALAN R. KUSINITZ, ESQ.
N. Y. STATE DEPT. OF LAW
10 120 BROADWAY, SUITE 2601
NEW YORK, NEW YORK
3 - [add a note]
1 I N D E X
2 OPENING STATEMENT BY MR. WARDEN PAGE 4
4 - [add a note]
1 P-R-O-C-E-E-D-I-N-G-S
2 THE DEPUTY CLERK: CIVIL ACTION 98-1232 AND
3 98-1233, UNITED STATES VERSUS MICROSOFT CORP. AND THE
4 STATE OF NEW YORK, ET AL., VERSUS MICROSOFT CORP..
5 PHILLIP MALONE, STEVEN HOUCK AND DAVID BOIES FOR
6 THE PLAINTIFF.
7 JOHN WARDEN, STEVEN HOLLEY, RICHARD UROWSKY AND
8 WILLIAM NEUKOM FOR THE DEFENDANT.
9 THE COURT: MR. WARDEN, YOU HAVE THE STAGE.
10 MR. WARDEN: THANK YOU, YOUR HONOR.
11 OPENING STATEMENT ON BEHALF OF MICROSOFT
12 MR. WARDEN: AS YOUR HONOR KNOWS, JOHN WARDEN OF
13 SULLIVAN AND CROMWELL FOR MICROSOFT. I WOULD LIKE TO
14 INTRODUCE MY COLLEAGUES AT THE COUNSEL TABLE, NOT ALL OF
15 WHOM YOUR HONOR HAS PREVIOUSLY MET AND MANY OF WHOM WILL
16 PLAY A PART IN THIS TRIAL FOR US.
17 OF COURSE, YOUR HONOR KNOWS BILL NEUKOM,
18 MICROSOFT'S GENERAL COUNSEL, WHO WILL BE THE CORPORATE
19 REPRESENTATIVE AT THIS PROCEEDING. ALSO FROM MR. NEUKOM'S
20 OFFICE ARE TOM BURT AND DAVID HEINER, WHOM YOU HAVE MET.
21 FROM SULLIVAN AND CROMWELL, YOU KNOW STEVE HOLLEY, AS WELL
22 AS RICHARD UROWSKY, WHO IS UPSTAIRS THIS MORNING ON THE 15
23 U.S.C. SECTION 30 APPEAL. IN ADDITION, WE HAVE TED EDEMAN,
24 MICHAEL LACOVARA AND STEPHANIE WHEELER.
25 THE COURT: I'M PLEASED TO HAVE YOU ALL.
5
1 MR. WARDEN: THANK YOU.
2 AS YOUR HONOR KNOWS, WE FIRMLY BELIEVE THIS TRIAL
3 TO BE WHOLLY UNNECESSARY BECAUSE THE FACTS OF DECISIONAL
4 CONSEQUENCE ARE, IN OUR VIEW, UNDISPUTED. TODAY, HOWEVER, I
5 WILL PUT THAT POSITION ASIDE AND ADDRESS THE PROOF WE WILL
6 ADDUCE AT TRIAL.
7 WE WILL SHOW THAT MICROSOFT IS RIGHT ON THE FACTS
8 AS WELL AS THE LAW, AND RIGHT ON THE LARGER QUESTION OF HOW
9 TO PROMOTE INNOVATION, ECONOMIC GROWTH AND CONSUMER BENEFIT.
10 AS AN INITIAL MATTER, LET ME SAY THAT THE
11 GOVERNMENT'S CASE IS LONG ON RHETORIC AND SHORT ON
12 SUBSTANCE. THE EFFORT TO DEMONIZE BILL GATES IN THE OPENING
13 STATEMENTS IS EMBLEMATIC OF THIS APPROACH WHICH WRONGLY
14 CHARACTERIZES EVIDENCE OF TOUGH COMPETITION AS PROOF OF
15 ANTI-COMPETITIVE CONDUCT.
16 THE ANTITRUST LAWS ARE NOT A CODE OF CIVILITY IN
17 BUSINESS, AND A PERSONAL ATTACK ON A MAN WHOSE VISION AND
18 INNOVATION HAVE BEEN AT THE CORE OF THE VAST BENEFITS THAT
19 PEOPLE ARE REAPING FROM THE INFORMATION AGE IS NO SUBSTITUTE
20 FOR PROOF OF ANTI-COMPETITIVE CONDUCT AND ANTI-COMPETITIVE
21 EFFECTS.
22 THE EVIDENCE WILL SHOW THAT COMPANIES LIKE
23 MICROSOFT AND INTEL THAT DEVELOP COMPLEMENTARY PRODUCTS MUST
24 TALK TO EACH OTHER ON A ROUTINE BASIS TO PREVENT THE
25 CREATION OF TECHNICAL INCOMPATIBILITIES THAT ADVERSELY
6
1 AFFECT THE OPERATIONS OF THEIR PRODUCTS AND, THUS,
2 CONSUMERS.
3 AS YOUR HONOR IS WELL AWARE, MICROSOFT OPERATING
4 SYSTEMS AT THE MOMENT RUN PRIMARILY ON INTEL
5 MICROPROCESSORS, AND MOST COMPUTERS THAT CONTAIN INTEL
6 MICROPROCESSORS USE MICROSOFT OPERATING SYSTEMS. THE
7 COMPANIES HAVE A SYMBIOTIC RELATIONSHIP. THAT DOES NOT
8 MEAN, HOWEVER, THAT THEY ALWAYS AGREE ABOUT EVERYTHING.
9 SOMETIMES THEY DISAGREE ABOUT HOW BEST TO ADVANCE THEIR
10 MUTUAL INTERESTS, BUT THE FACT THAT SUCH DISAGREEMENTS OCCUR
11 IS HARDLY EVIDENCE OF AN ANTITRUST VIOLATION. NOR IS IT A
12 VIOLATION THAT DISAGREEMENTS ARE RESOLVED BY ADOPTING A
13 COMMON PLAN TO DEVELOP NEW TECHNOLOGIES JOINTLY.
14 LIKE THE OPENING STATEMENTS, THE WRITTEN DIRECT
15 TESTIMONY OF THE GOVERNMENT'S WITNESSES RELIES HEAVILY ON
16 SNIPPETS OF MICROSOFT E-MAIL MESSAGES THAT ARE TAKEN OUT OF
17 CONTEXT. NOW, I HAVE NO INTENTION THIS MORNING -- AND TIME
18 WOULDN'T PERMIT -- TO RESPOND TO EACH OF THE DOCUMENTS
19 MR. BOIES REFERRED TO IN HIS OPENING. BUT I MARKED UP A
20 COUPLE OF EXAMPLES WHILE HE WAS SPEAKING TO THE COURT
21 YESTERDAY WHICH I THINK SUFFICE TO SHOW HOW MISLEADING IT
22 CAN BE TO RELY ON THESE SNIPPETS.
23 I WILL PUT THESE ON THE ELMO, AND SINCE I MARKED
24 UP THE ONES THAT WE HAD WITH EXHIBIT TABS ON THEM, THEY ARE
25 NOT -- THEY DON'T HAVE TABS. BUT THIS IS IN YOUR BINDER,
7
1 GOVERNMENT'S EXHIBIT 43 AND -- I AM SORRY. THAT IS THE
2 WRONG DOCUMENT. THAT IS SUPPOSED TO BE THE SEPTEMBER 16TH
3 E-MAIL.
4 MR. BOIES DREW THE COURT'S ATTENTION TO THIS
5 SERIES OF E-MAILS CULMINATING IN THE TOP LINE: WE WILL DO
6 SOMETHING TO MAKE THIS HARD IN MEMPHIS, WINDOWS 95. I AM
7 SORRY. WINDOWS 98. THE FACT OF THE MATTER IS THAT WE
8 DIDN'T. THERE IS NO EVIDENCE THAT WE DID FROM A SINGLE
9 WITNESS AND MR. STORK, THE AUTHOR OF THE DOCUMENT, HAS
10 TESTIFIED THAT WE DID NOT.
11 NOW, I WILL DO GO TO WHAT HAS BEEN MARKED AS
12 GOVERNMENT'S EXHIBIT 277. AND THE PART I WILL REFER TO AND
13 HE REFERRED TO -- E-MAIL FROM BILL GATES TO ANDY GROVE, THE
14 C.E.O. OF INTEL. AND IT RELATES, AS YOUR HONOR HEARD
15 YESTERDAY, TO THE GROUP OF TECHNOLOGIES LOOSELY REFERRED TO
16 AS NATIVE SIGNAL PROCESSING.
17 MR. BOIES ASSERTED THAT THE E-MAIL EVIDENCED AN
18 ATTEMPT BY MICROSOFT TO PERSUADE INTEL NOT TO COMPETE IN
19 DEVELOPING SOFTWARE. BUT PORTIONS OF E-MAIL THAT MR. BOIES
20 DID NOT READ DESTROY THAT ASSERTION. AND I DRAW YOUR
21 ATTENTION TO THE SECOND PARAGRAPH OF THE GATES E-MAIL WHICH
22 IS ON DOWN IN THE DOCUMENT, BEGINNING: NSP MEANS A LOT OF
23 DIFFERENT THINGS. IT SAYS: WHAT IT MEANS IN TERMS OF
24 HARDWARE AND THE PROCESSOR BEING ABLE TO TAKE OVER MORE AND
25 MORE FUNCTIONS IS NONCONTROVERSIAL. WHAT IS A PROBLEM IS
8 - [add a note]
1 THE INCOMPATIBILITY AND OVERLAP OF SYSTEM SOFTWARE DONE
2 UNDER THAT LABEL, THE LABEL NSP. ACTUALLY, SOME OF THE
3 SOFTWARE ELEMENTS ARE OKAY. WE STILL SEEM TO HAVE A COMMON
4 VIEW OF VARIOUS OF THOSE ELEMENTS. EACH OF THESE HAS TO BE
5 IMPROVED. SO WITH OUR CURRENT RELATIONSHIP, WE WILL
6 PROBABLY DIVERGE ON EACH OF THESE. THE ONES THAT ARE A
7 MAJOR PROBLEM FOR WINDOWS 95 AND WINDOWS NT TODAY ARE -- AND
8 HE SPECIFIES CERTAIN ONES. AND HE SAYS THESE ARE
9 INCOMPATIBLE WITH WHERE WE ARE TAKING WINDOWS AND HAVE MANY
10 PROBLEMS WITH WINDOWS 95.
11 HE GOES ON LATER IN THE DOCUMENT TO A PARAGRAPH
12 THAT BEGINS, "STRUCTURALLY," THREE PARAGRAPHS LATER OR FOUR
13 PARAGRAPHS LATER: IT'S VERY HARD TO HAVE OUR PEOPLE WORKING
14 AS BEST THEY CAN TO ADVANCE PC SOFTWARE STANDARDS WITH A
15 GROUP OF 200 PEOPLE -- THOSE ARE THE INTEL PEOPLE -- FULLY
16 FUNDED, TO BASICALLY TRY TO DO THE SAME THING IN PARALLEL
17 WITH NO GUIDANCE TO COORDINATE WITH US AT ALL. THEY DON'T
18 SHARE WITH US BECAUSE OF INTEL'S IP, INTELLECTUAL PROPERTY
19 ATTITUDE. WE TRIED SHIPPING SOME INTEL CODE RELATIVE TO DCI
20 AND ENDED UP IN THIS APPLE LAWSUIT THAT'S BEEN VERY
21 DAMAGING.
22 HE GOES ON TO TALK AGAIN IN THE NEXT PARAGRAPH
23 ABOUT HOW, EVEN IF THIS IS FIXED TO RUN WITH WINDOWS 95, IT
24 WON'T WORK ON WINDOWS NT. AND THE EVIDENCE WILL SHOW THAT
25 MICROSOFT'S CONCERN ABOUT THIS PRODUCT WAS -- THAT THIS
9 - [add a note]
1 NSP -- WAS THAT PUTTING IT OUT AT THAT TIME WOULD CAUSE
2 PROBLEMS FOR BOTH MICROSOFT AND THE OEM'S BECAUSE IT DID NOT
3 WORK WITH AND HADN'T BEEN TESTED WITH WINDOWS 95. AND IF IT
4 WERE PREINSTALLED AND THEN SOMETHING WENT WRONG, THE OEM'S
5 AND MICROSOFT WOULD TAKE THE HEAT.
6 I URGE YOUR HONOR TO VIEW WITH CONSIDERABLE
7 SKEPTICISM THE CRAZY QUILT OF E-MAIL FRAGMENTS THAT SEEM TO
8 FORM THE CORE OF THE GOVERNMENT'S CASE AND TO DO THE SAME
9 WITH DEPOSITION EXCERPTS TAKEN OUT OF CONTEXT.
10 FOR EXAMPLE, YESTERDAY MR. BOIES PLAYED AN EXCERPT
11 FROM THE DEPOSITION OF MR. GATES IN WHICH MR. GATES SAID
12 THAT HE HAD FIRST LEARNED BY READING THE WALL STREET JOURNAL
13 THAT AN ALLEGATION HAD BEEN MADE THAT MICROSOFT HAD PROPOSED
14 OR DISCUSSED WITH NETSCAPE, IN THE SUMMER OF 1995, DIVISION
15 OF MARKETS. THERE IS NOTHING THAT WILL COME INTO EVIDENCE
16 THAT WILL IMPEACH THAT. THERE IS NO REPORT WITHIN MICROSOFT
17 OF PROPOSALS TO DIVIDE MARKETS. IF MR. BOIES INTENDED TO
18 IMPLY BY SHOWING THAT CLIP THAT MR. GATES DENIED KNOWING OF
19 DEALINGS BETWEEN MICROSOFT AND NETSCAPE, THE FACT THAT THERE
20 WERE DISCUSSIONS BETWEEN THE TWO PARTIES IN 1995, THAT WAS
21 WHOLLY UNFOUNDED. HE DIDN'T DENY THAT.
22 NOW I AM GOING TO TURN TO MICROSOFT'S ALLEGED
23 TYING OF WEB BROWSING SOFTWARE TO THE WINDOWS 98 OPERATING
24 SYSTEM, THE ALLEGATION THAT WAS AT THE CORE OF THE
25 GOVERNMENT'S CASE BACK IN MAY AND WAS THE PURPORTED SOURCE
10
1 OF THE FICTITIOUS URGENCY THAT LED TO THE HIGHLY EXPEDITED
2 SCHEDULE WE HAVE HAD.
3 FROM RECENT PRESENTATIONS BY THE GOVERNMENT, YOU
4 WOULD NEVER KNOW THE CENTRAL ROLE THAT THAT TYING ALLEGATION
5 ONCE PLAYED IN THE CASE. INSTEAD, WE NOW HEAR AND HEARD
6 YESTERDAY A GREAT DEAL, FOR EXAMPLE, ABOUT PREDATORY
7 PRICING, WHICH IS NOWHERE IN THE COMPLAINTS AND FOR GOOD
8 REASON. SUCH A CLAIM WOULD BE FRIVOLOUS, GIVEN THE
9 CONTRIBUTION THAT INTERNET EXPLORER TECHNOLOGIES MAKE TO
10 WINDOWS, A PRODUCT WHICH IS NOT KNOWN TO BE A MONEY-LOSER
11 FOR MICROSOFT.
12 IN ADDITION, AS YOUR HONOR KNOWS, PART OF A
13 PREDATORY PRICING CLAIM IS RECOUPMENT, AND WE HAVE HAD NO
14 ATTEMPT TO EXPLAIN HOW ANYONE COULD EVER RECOUP SUPPOSED
15 LOSSES ON A PRODUCT THAT IS FOREVER FREE.
16 NOW, AS TO THE TYING ALLEGATION, WHICH IS WHAT
17 STARTED THIS CASE OFF, TOGETHER WITH THE BACKGROUND NOISE
18 ABOUT ALL THESE CONTRACTS THAT ALLEGEDLY LOCK UP
19 DISTRIBUTION, THE EVIDENCE WILL CONFIRM WHAT MICROSOFT HAS
20 BEEN SAYING ALL ALONG, NAMELY THAT INTERNET EXPLORER
21 TECHNOLOGIES ARE AN INTEGRAL PART OF THE OPERATING SYSTEM
22 AND CANNOT BE REMOVED FROM WINDOWS 98 WITHOUT SERIOUSLY
23 DEGRADING IT.
24 THE GOVERNMENT'S WARD, NETSCAPE, AGREES WITH
25 MICROSOFT ON THIS FUNDAMENTAL POINT. UNLIKE MR. BOIES, I AM
11 - [add a note]
1 HAPPY TO HAVE THE COURT FOCUS ON THE LETTER THAT PROVES THIS
2 POINT. ON MARCH 6, 1998, MORE THAN TWO MONTHS BEFORE THE
3 COMPLAINTS IN THIS CASE WERE FILED -- AND YOUR HONOR HAS
4 SEEN THIS DOCUMENT BEFORE -- NETSCAPE'S COUNSEL WROTE THE
5 ASSISTANT ATTORNEY GENERAL, JOEL KLEIN, IN A LETTER
6 ADDRESSED, DEAR JOEL, CONCERNING THE RELIEF NETSCAPE WOULD
7 LIKE TO SEE EMBODIED IN ANY CONSENT DECREE, SIGNED BY
8 MICROSOFT. THE LETTER STATES THAT NETSCAPE IS, QUOTE,
9 TOTALLY UNABLE TO PROVIDE EXAMPLES OF FILES THAT CAN OR
10 CANNOT BE DELETED FROM WINDOWS 98 SINCE, AS WE DISCUSSED
11 THIS WEEK, IT IS SIMPLY NOT POSSIBLE TO DELETE ANY PORTION
12 OF IE OR OF THE BROWSER FUNCTIONALITY FROM WINDOWS 98, AS
13 PRESENTLY CONFIGURED, WITHOUT SEVERELY INTERFERING WITH THE
14 OPERATING SYSTEM.
15 ANY ATTEMPT AT ANY STAGE OF THIS PROCEEDING TO
16 ANALOGIZE A FUNCTIONALITY SO DESCRIBED TO THE
17 ANESTHESIOLOGIST THAT WALKS ON HIS OWN LEGS IN AND OUT OF
18 THE OPERATING ROOM IN JEFFERSON PARISH IS RIDICULOUS.
19 MICROSOFT COULD NOT HAVE MADE THE POINT MORE CLEARLY ITSELF
20 THAN NETSCAPE'S COUNSEL MADE IT TO JOEL KLEIN. AND THIS IS
21 NOT A TECHNICALLY UNSOPHISTICATED LAWYER GETTING HIS FACTS
22 MIXED UP. HE IS SPEAKING ON BEHALF OF HIS CLIENT, AND EACH
23 OF THE SENIOR EXECUTIVES OF NETSCAPE DEPOSED BY MICROSOFT
24 HAS TESTIFIED THAT THEY REGARD INTERNET EXPLORER TO BE AN
25 INTEGRATED ELEMENT OF WINDOWS 98.
12 - [add a note]
1 WE EXPECT THERE TO BE NO COMPETENT EVIDENCE THAT
2 WINDOWS 98 IS ANYTHING BUT A SINGLE INTEGRATED PRODUCT THAT
3 PROVIDES BOTH END USERS AND SOFTWARE DEVELOPERS WITH A WIDE
4 RANGE OF BENEFICIAL FEATURES. ONE OF THOSE FEATURES IS THE
5 ABILITY TO LOCATE AND VIEW INFORMATION ON THE INTERNET.
6 HOWEVER, THE VERY SOFTWARE CODE IN WINDOWS 98 THAT PERFORMS
7 THAT FUNCTION ALSO PERFORMS OTHER FUNCTIONS THAT HAVE NO
8 NECESSARY CONNECTION TO WEB BROWSING.
9 THIS IS LIKE THE INDUSTRIAL ROBOT REFERRED TO BY
10 JUDGE RANDOLPH IN THE COURT OF APPEALS THAT BOTH WELDS AND
11 RIVETS. IE CODE IN WINDOWS 98 PERFORMS MULTIPLE TASKS SO
12 THAT IT CANNOT BE REMOVED; THAT IS NOT AN OPTION.
13 THE GOVERNMENT HAS NO ANSWER TO THE FACT THAT IE
14 TECHNOLOGIES ARE RELIED ON BY OTHER PARTS OF WINDOWS 98, AS
15 WELL AS BY INDEPENDENT SOFTWARE DEVELOPERS WHO WANT TO
16 INCORPORATE SUPPORT FOR INTERNET STANDARDS, SUCH AS HTML,
17 INTO THEIR PRODUCTS.
18 JIM ALLCHIN FROM MICROSOFT WILL BE ONE OF OUR
19 WITNESSES, AND HE WILL EXPLAIN THE MANY WAYS IN WHICH
20 WINDOWS 98 ITSELF DEPENDS ON INTERNET EXPLORER TECHNOLOGIES,
21 INCLUDING, MOST OBVIOUSLY, THE FACT THAT THE NEW USER
22 INTERFACE FOR THE OPERATING SYSTEM AS A WHOLE IS SUPPLIED BY
23 THOSE TECHNOLOGIES. IN ADDITION, WE WILL PRESENT TESTIMONY
24 FROM MIKE DEVLIN, FROM RATIONAL SOFTWARE, WHO WILL EXPLAIN
25 HOW HIS COMPANY'S PRODUCTS AND THOSE OF OTHER INDEPENDENT
13 - [add a note]
1 SOFTWARE DEVELOPERS RELY ON THE INTERNET EXPLORER
2 TECHNOLOGIES IN WINDOWS 98 TO OBTAIN CRUCIAL FUNCTIONALITY
3 AND HOW THOSE SOFTWARE DEVELOPERS WOULD BE ADVERSELY
4 AFFECTED IF IE TECHNOLOGIES WERE REMOVED FROM THE OPERATING
5 SYSTEM.
6 WE WILL ALSO DEMONSTRATE THE MANY BENEFITS THAT
7 FLOW TO CONSUMERS FROM THE INTEGRATED DESIGN OF WINDOWS 98,
8 INCLUDING SUBSTANTIAL IMPROVEMENTS AND EASE OF USE. BECAUSE
9 THE GOVERNMENT IS FORCED TO ACKNOWLEDGE THAT INTERNET
10 EXPLORER TECHNOLOGIES CANNOT BE REMOVED ON A WHOLESALE BASIS
11 FROM WINDOWS 98, IT RESORTS TO SEMANTIC GAMES. THEIR
12 WITNESS, PROFESSOR FELTEN, WILL TESTIFY THAT HE SPENT SIX
13 WEEKS ATTEMPTING TO HIDE EVERY MEANS OF END USER ACCESS TO
14 WEB-BROWSING FUNCTIONALITY IN WINDOWS 98, BUT HE DIDN'T
15 SUCCEED. AND IN THE PROCESS OF TRYING, HE MANAGED TO SCREW
16 UP THE OPERATING SYSTEM. PROFESSOR FELTEN DOES NOT EVEN
17 CLAIM TO HAVE REMOVED INTERNET EXPLORER TECHNOLOGIES FROM
18 WINDOWS 98. SO HIS FAILED EFFORT TO HIDE THEM ONLY PROVES
19 MICROSOFT'S POINT.
20 GLENN WEADOCK, WHO WAS HERE BACK IN JANUARY,
21 ANOTHER OF THE GOVERNMENT'S EXPERTS, WILL TESTIFY THAT,
22 DESPITE HIS BEST EFFORTS, HE TOO WAS UNABLE EVEN TO HIDE ALL
23 OF THE MANY WAYS IN WHICH CONSUMERS CAN ACCESS WEB-BROWSING
24 FUNCTIONALITY IN WINDOWS 98. BUT THE ULTIMATE SEMANTICIST,
25 PROFESSOR FARBER, WILL ADVANCE THE PROPOSITION THAT THERE IS
14 - [add a note]
1 A COGNIZABLE DIFFERENCE BETWEEN THE PRODUCT THAT MICROSOFT
2 MARKETS AS WINDOWS 98 AND WHAT HE REGARDS AS THE KERNEL OF A
3 TRUE OPERATING SYSTEM FUNCTIONALITY THAT'S HIDDEN SOMEWHERE
4 INSIDE THAT PRODUCT.
5 NOW, PROFESSOR FARBER SAYS IT'S FINE FOR MICROSOFT
6 TO INCLUDE IE TECHNOLOGIES IN THE PRODUCT CALLED WINDOWS 98,
7 BUT IT'S NOT ALL RIGHT FOR THEM TO INCLUDE THEM IN THE SMALL
8 SUBSET OF THE PRODUCT THAT HE CHOOSES TO CALL AN OPERATING
9 SYSTEM.
10 THIS PRODUCT, AS HE DEFINES IT, DOES NOT INCLUDE
11 BASIC COMPONENTS LIKE A USER INTERFACE AND A FILE SYSTEM.
12 THAT TESTIMONY FALLS OF ITS OWN WEIGHT. AND SUCH MUSINGS
13 FROM THE ACADEMY ABOUT THE THEORETICAL DEFINITION OF AN
14 OPERATING SYSTEM HAVE NO DECISIONAL SIGNIFICANCE.
15 AS JOHN ROSE FROM COMPAQ WILL EXPLAIN, ORDINARY
16 CONSUMERS WHO BUY COMPUTERS AT WAL-MART HAVE NO INTEREST IN
17 PIECING TOGETHER AN OPERATING SYSTEM FROM A GRAB BAG OF
18 SEPARATELY MARKETED COMPONENTS, UNLIKE CERTAIN ELECTRICAL
19 ENGINEERS, RESEARCH SCIENTISTS OR WHATEVER WHO GET THEIR
20 KICKS OUT OF DOING THAT. THEY WANT THEIR NEW MACHINE TO
21 COME OUT OF THE BOX -- CONSUMERS DO -- AND JUST WORK. AS
22 YOUR HONOR KNOWS, IT'S OUR POSITION WE'RE FULLY ENTITLED TO
23 PROVIDE THE CONSUMER WITH WHAT THEY WANT.
24 UNDER THE STANDARDS APPLICABLE HERE, THE
25 GOVERNMENT MUST SHOW THAT WHATEVER BENEFITS RESULT FROM THE
15 - [add a note]
1 INTEGRATED DESIGN OF WINDOWS 98, COULD EQUALLY BE ACHIEVED
2 BY OEM'S OR END USERS. THEY HAVE NO SUCH EVIDENCE. INDEED,
3 VARIOUS OF THE GOVERNMENT'S WITNESSES WILL INSTEAD OPINE
4 THAT WEB BROWSING SOFTWARE SHOULD BE VIEWED IN THE ABSTRACT
5 AS AN APPLICATION RATHER THAN AS AN ELEMENT OF AN OPERATING
6 SYSTEM. THESE ARE OPINIONS OF PEOPLE IGNORANT OF THE
7 INTERNAL ARCHITECTURE OF WINDOWS 98 AND HAVE NO EVIDENTIARY
8 VALUE. NETSCAPE MAY HAVE DESIGNED ITS WEB BROWSING SOFTWARE
9 AS AN APPLICATION, BUT MICROSOFT DID NOT AND IT HAD NO
10 OBLIGATION TO ADOPT THE SAME APPROACH.
11 THE TESTIMONY OF MICROSOFT WITNESSES WILL SHOW
12 THAT THE INTEGRATION OF SUPPORT FOR INTERNET STANDARDS IN
13 WINDOWS 98 OCCURRED AT THE INITIAL DESIGN STAGE WITH THE
14 SAME SOFTWARE CODE, AS I HAVE SAID, PERFORMING MULTIPLE
15 FUNCTIONS, AND THAT THE OPERATING SYSTEM WAS DEVELOPED AND
16 TESTED ON THAT INTEGRATED BASIS.
17 OUR EVIDENCE, PRINCIPALLY PRESENTED THROUGH PAUL
18 MARITZ AND JIM ALLCHIN, WILL ESTABLISH THAT INTERNET
19 EXPLORER IS NOT A STAND-ALONE WEB BROWSER THAT HAS SIMPLY
20 BEEN BOLTED ON TOP OF WINDOWS 98. BECAUSE THE RELEVANT
21 INTEGRATION OCCURRED AT THE DESIGN STAGE, THE DEMONSTRABLE
22 CONSUMER BENEFITS THAT RESULT FROM THAT INTEGRATION CANNOT
23 BE REPLICATED BY OEM'S OR END USERS. IT'S THAT SIMPLE.
24 WE DO NOT UNDERSTAND THE GOVERNMENT TO BE
25 CONTENDING THAT THE INCLUSION OF IE TECHNOLOGIES IN WINDOWS
16 - [add a note]
1 98 PROVIDES NO CONSUMER BENEFITS, BUT IF THAT CONTENTION IS
2 MADE, IT WILL BE UNDERMINED BY THE GOVERNMENT'S OWN
3 WITNESSES.
4 FOR EXAMPLE, JOHN SOYRING OF IBM BELIEVES THAT
5 HAVING A SINGLE USER INTERFACE FOR VIEWING BOTH INFORMATION
6 STORED LOCALLY ON HARD DISKS OR FLOPPY DISKS AND INFORMATION
7 STORED REMOTELY ON NETWORK SERVERS AND THE INTERNET IS
8 BENEFICIAL TO CONSUMERS. HE IS THE GOVERNMENT WITNESS. HE
9 IS PLAINLY RIGHT ABOUT THAT, AS ARE OTHERS OF THE
10 GOVERNMENT'S WITNESSES.
11 IN SUM, THE WEB-BROWSING FUNCTIONALITY IN
12 WINDOWS 98 IS NOT AN ADD-ON LIKE A FLASH ON A CAMERA OR A
13 CAR RADIO, BUT AN INTEGRAL FEATURE OF THE PRODUCT, LIKE THE
14 SHUTTER IN A CAMERA OR THE TRANSMISSION IN AN AUTOMOBILE.
15 MOREOVER, INTERNET EXPLORER TECHNOLOGIES IN WINDOWS 98
16 PROVIDE PROGRAMMING INTERFACES THAT INDEPENDENT APPLICATION
17 DEVELOPERS USE TO OBTAIN FUNCTIONALITY FROM THE OPERATING
18 SYSTEM TO MAKE THEIR PRODUCTS BETTER.
19 THE GOVERNMENT HAS TRIED TO INJECT MOTIVE INTO THE
20 DISCUSSION OF INTEGRATION. IN OUR VIEW, MOTIVE IS
21 IRRELEVANT ONCE THE FACT OF INTEGRATION, AS OPPOSED TO MERE
22 BUNDLING, IS SHOWN, ALONG WITH CONSUMER BENEFITS, PLAUSIBLE
23 IN NATURE, FLOWING FROM THAT INTEGRATION. NONETHELESS, WE
24 WILL REBUT ANY SHOWING THE GOVERNMENT SEEKS TO MAKE ON THIS
25 POINT, AND THE EVIDENCE WILL SHOW BOTH THAT THE INTEGRATION
17 - [add a note]
1 OF WEB-BROWSING FUNCTIONALITY INTO WINDOWS MADE GOOD
2 SENSE -- INDEED, HAVING AN ENTIRELY SEPARATE MECHANISM FOR
3 BROWSING THE WEB, LOCATING AND VIEWING INFORMATION ON THE
4 INTERNET, WOULD HAVE BEEN MISGUIDED -- AND THAT MICROSOFT
5 INTENDED TO PROVIDE CONSUMERS WITH SEAMLESS ACCESS TO
6 INFORMATION WITHOUT REGARD TO WHERE THE INFORMATION WAS
7 STORED LONG BEFORE ANYONE HAD EVER HEARD OF NETSCAPE. THE
8 GOVERNMENT CANNOT DENY THAT MICROSOFT EXECUTIVES WERE
9 DISCUSSING PUBLICLY THE VISION OF INFORMATION AT YOUR
10 FINGERTIPS WHILE MARK ANDREESEN, NETSCAPE'S CO-FOUNDER, WAS
11 STILL A STUDENT AT THE UNIVERSITY OF ILLINOIS.
12 MOREOVER, THE EVIDENCE WILL SHOW THAT MICROSOFT'S
13 EFFORT TO DEVELOP THE FIRST VERSION OF INTERNET EXPLORER,
14 CODE NAME O'HARE, WAS UNDERTAKEN BY THE TEAM DEVELOPING
15 WINDOWS 95, CODE NAME CHICAGO, BEFORE NETSCAPE RELEASED THE
16 FIRST BETA TEST VERSION OF NAVIGATOR IN OCTOBER, 1994. THE
17 GOVERNMENT'S ASSERTION THAT CHICAGO AND O'HARE WERE NOT
18 CLOSELY RELATED IS REBUTTED BY THE CODE NAMES THEMSELVES AS
19 WELL AS NUMEROUS CONTEMPORANEOUS DOCUMENTS.
20 THE FACT THAT MICROSOFT MAY HAVE BEEN SPURRED INTO
21 ACCELERATING ITS EFFORTS TO BUILD SUPPORT FOR INTERNET
22 STANDARDS INTO WINDOWS BY THE RAPID COMMERCIAL SUCCESS
23 UNDOUBTEDLY ACHIEVED BY NETSCAPE IS PRECISELY HOW THE
24 COMPETITIVE PROCESS IS SUPPOSED TO WORK. THE E-MAILS THE
25 GOVERNMENT RELIES ON DON'T SHOW THAT MICROSOFT IS A
18 - [add a note]
1 MONOPOLIST THAT CAN AFFORD TO IGNORE UPSTARTS LIKE NETSCAPE,
2 BUT THAT MICROSOFT IS FORCED TO RESPOND TO COMPETITIVE
3 CHALLENGES FROM MANY QUARTERS.
4 THE GOVERNMENT CANNOT COME TO THIS COURT AND
5 SERIOUSLY CONTEND THAT MICROSOFT SHOULD HAVE ITS HANDS TIED
6 BEHIND ITS BACK, UNABLE TO RESPOND TO CHANGES IN THE
7 MARKETPLACE. THAT BENEFITS NO ONE, PARTICULARLY CONSUMERS.
8 THE GOVERNMENT SIMPLY REFUSES TO COME TO GRIPS WITH THE FACT
9 THAT, ALTHOUGH THE FIRST TWO VERSIONS OF INTERNET EXPLORER
10 WERE INCLUDED IN WINDOWS 95 AS SUPPLIED TO OEM'S -- THAT'S
11 1.0 AND 2.0 -- AND ALTHOUGH INCLUSION IN THE OPERATING
12 SYSTEM, ACCORDING TO THE GOVERNMENT, SUPPOSEDLY CONFERS
13 INSUPERABLE ADVANTAGES, THE VAST MAJORITY OF CONSUMERS
14 CONTINUED TO USE NETSCAPE'S WEB BROWSING SOFTWARE UNTIL
15 MICROSOFT HAD DRAMATICALLY IMPROVED INTERNET EXPLORER, IN
16 PART BY FURTHER INTEGRATING IT INTO WINDOWS. THAT'S WHEN
17 CONSUMERS BEGAN USING MICROSOFT'S TECHNOLOGY FOR WEB
18 BROWSING IN LARGE NUMBERS.
19 EVIDENCE THAT MICROSOFT VIEWED CHANGES IN CONSUMER
20 DEMAND AS POTENTIAL THREATS TO ITS FUTURE BUSINESS SUCCESS
21 ADDS NOTHING TO OUR ANALYSIS. IN FACT, IF MICROSOFT WAS
22 REALLY THE MONOPOLIST THE GOVERNMENT'S POSITS, IT WOULD NOT
23 BE THREATENED BY ANYONE BECAUSE IT WOULD CONTROL PRODUCTIVE
24 CAPACITY AND THUS COULD EXCLUDE OTHER COMPANIES FROM THE
25 SOFTWARE BUSINESS WITHOUT DIFFICULTY.
19 - [add a note]
1 THOSE ARE NOT THE FACTS. THOSE ARE NOT THE FACTS.
2 INSTEAD, MICROSOFT WILL SPEND MORE THAN $3 BILLION ON
3 RESEARCH AND DEVELOPMENT DURING ITS CURRENT FISCAL YEAR IN
4 ORDER TO KEEP PACE WITH ITS MANY AGGRESSIVE COMPETITORS.
5 THAT I SUBMIT, YOUR HONOR, IS HARDLY WHAT MR. HOUCK REFERRED
6 TO YESTERDAY AS THE QUIET LIFE OF A MONOPOLIST.
7 NOW I TURN TO THE SECOND ASPECT OF THE CASE AS
8 ORIGINALLY BROUGHT IN MAY, NAMELY THE CONTRACTS THAT
9 MICROSOFT ENTERED INTO WITH ISP'S, ICP'S, AND ON-LINE
10 SERVICES, THE LATTER BEING EXEMPLIFIED BY AOL. THE
11 GOVERNMENT CONTENDS, AS THE COURT KNOWS, THAT THESE
12 AGREEMENTS ARE UNLAWFUL EXCLUSIVE DEALING AGREEMENTS UNDER
13 BOTH SHERMAN 1 AND SHERMAN 2.
14 THESE CONTRACTS WERE ENTERED INTO WHEN MICROSOFT
15 HAD A SINGLE-DIGIT USAGE FIGURE FOR ITS WEB BROWSING
16 SOFTWARE. IN OTHER WORDS, MICROSOFT'S WEB BROWSING SOFTWARE
17 WAS USED BY LESS THAN 10 PERCENT OF THOSE BROWSING THE WEB.
18 THESE CONTRACTS WERE, THEREFORE, ACTUALLY NOT ONLY
19 COMPETITIVELY UNOBJECTIONABLE, BUT PRO-COMPETITIVE BECAUSE
20 THEY HELPED TO REDUCE NETSCAPE'S OVERWHELMING DOMINANCE AND
21 GAVE CONSUMERS A CHOICE.
22 THE NOTION THAT CONTRACTS THAT REDUCE
23 CONCENTRATION CAN BE ATTACKED AS ANTI-COMPETITIVE SHOWS HOW
24 FAR THE GOVERNMENT HAS DEPARTED FROM FUNDAMENTAL PRINCIPLES
25 OF ANTITRUST ANALYSIS. THOSE PRINCIPLES, AS THE COURT IS
20 - [add a note]
1 WELL AWARE, FOCUS ON HARM TO COMPETITION AND NOT ON LOST
2 SALES OF PARTICULAR COMPANIES, LIKE NETSCAPE.
3 THERE IS REMARKABLY LITTLE IN THE GOVERNMENT'S
4 EVIDENCE OF ANY ADVERSE EFFECT ON CONSUMERS OF THE
5 CHALLENGED MICROSOFT CONTRACTS. I HEARD NOTHING ABOUT THAT
6 YESTERDAY BECAUSE -- AND THERE CAN'T BE ANYTHING SAID ABOUT
7 IT BECAUSE THESE CONTRACTS RESULTED IN THE RAPID AND
8 WIDESPREAD DISTRIBUTION OF NEW TECHNOLOGIES TO CONSUMERS AT
9 VERY ATTRACTIVE PRICES. THAT, AFTER ALL, IS WHAT THE
10 ANTITRUST LAWS ARE ALL ABOUT.
11 AS TO THE FORM OF THESE CONTRACTS, AS YOUR HONOR
12 KNOWS, THEY SPEAK FOR THEMSELVES. THEY ARE
13 CROSS-PROMOTIONAL AGREEMENTS, COMMON IN ALL CONSUMER
14 BUSINESSES, AND ALL ARE SHORT-TERM. NONE IS TRULY
15 EXCLUSIVE. AND WITH THE EXCEPTION OF THE AOL AGREEMENT, TO
16 WHICH I WILL RETURN SHORTLY, THEY ARE ALL WITH DISTRIBUTORS,
17 NOT CONSUMERS. FIRST, AS TO THE ICP AGREEMENTS, WE WILL
18 SHOW THROUGH THE TESTIMONY OF THE RESPONSIBLE MICROSOFT
19 EXECUTIVE, WILL POOLE, THAT THEY WERE, IN ACTUALITY, OF VERY
20 LITTLE COMMERCIAL CONSEQUENCE.
21 FIRST, WE HAD SUCH CONTRACTS WITH ONLY 31 OF THE
22 THOUSANDS OF CONTENT PROVIDERS THAT HAVE COMMERCIALLY
23 SIGNIFICANT WEB SITES. AND NONE OF THE 31 -- NONE OF THESE
24 PEOPLE IS A MAJOR DISTRIBUTOR OF WEB BROWSING SOFTWARE. AS
25 A RESULT, THE NOTION THAT THEY FORECLOSED ANYTHING IS
21 - [add a note]
1 RIDICULOUS.
2 SECOND, THE CHANNEL BAR, TO WHICH THE ICP
3 AGREEMENTS RELATE, PROVE NOT TO BE VERY POPULAR WITH
4 CONSUMERS AND IS BEING PHASED OUT FOR THAT REASON. IN FACT,
5 BILL HARRIS OF INTUIT WILL TESTIFY THAT THE CHANNEL BAR WAS
6 A DISAPPOINTMENT TO INTUIT, MICROSOFT AND THE ENTIRE
7 INDUSTRY.
8 AS TO THE INTERNET SERVICE PROVIDER AGREEMENTS, WE
9 WILL SHOW THROUGH THE TESTIMONY OF THE RESPONSIBLE MICROSOFT
10 EXECUTIVE, CAMERON MYHRVOLD, THAT EACH AND EVERY ONE OF THE
11 ISP'S IN OUR REFERRAL SERVICE -- REFERRAL SERVER WAS FREE TO
12 PROVIDE NETSCAPE'S WEB BROWSING SOFTWARE TO CUSTOMERS WHO
13 ASKED FOR IT, AND THEY ALL HAVE, IN FACT, DONE SO. NOR WAS
14 A DEAL WITH MICROSOFT NECESSARY FOR THESE ISP'S TO GET ONTO
15 THE WINDOWS DESKTOP. DEALS WITH OEM'S COULD ACHIEVE THE
16 SAME RESULT. CUSTOMERS OF ISP'S GET THEIR WEB BROWSING
17 SOFTWARE THROUGH A VARIETY OF CHANNELS, WHICH EXPLAINS THE
18 FACT THAT MORE THAN HALF OF THE CUSTOMERS OF THE ISP'S AND
19 THE WINDOWS 95 REFERRAL SERVER USE NETSCAPE NAVIGATOR.
20 MOREOVER, THESE CONTRACTS COVERED ONLY 11 OF THE
21 MORE THAN 3,000 SERVICE PROVIDERS WHO PROVIDE INTERNET
22 ACCESS IN THE UNITED STATES AND, AS YOUR HONOR KNOWS, ALL
23 FIVE REGIONAL BELL OPERATING COMPANIES, WHO HAVE OBVIOUS
24 CONTACT WITH ALL OF AMERICA, HAVE PROMOTION AND DISTRIBUTION
25 CONTRACTS WITH NETSCAPE.
22 - [add a note]
1 THE EVIDENCE GOES FURTHER, HOWEVER. IT WILL SHOW
2 THAT WE DIDN'T REMOVE ANY ISP FROM THE REFERRAL SERVER FOR
3 FAILING TO ACHIEVE THE TARGET LEVEL OF INTERNET EXPLORER
4 DISTRIBUTION SPECIFIED IN ITS CONTRACT, EVEN THOUGH A NUMBER
5 OF THEM ARE WELL BELOW THE TARGETS BECAUSE THEY DISTRIBUTED
6 LARGE NUMBERS OF NETSCAPE'S WEB BROWSING SOFTWARE INSTEAD.
7 FINALLY, WE DIDN'T HAVE THESE PEOPLE TIED UP IN
8 KNOTS, AS THE GOVERNMENT APPARENTLY WOULD HAVE THE COURT
9 BELIEVE. FIVE OF THE ELEVEN WHO HAD CONTRACTS WITH US ALSO
10 APPEAR IN NETSCAPE'S REFERRAL SERVER. OUR CONTRACTS WERE
11 CLEARLY NOT EXCLUSIVE AND CERTAINLY NOT EXCLUSIONARY.
12 NOW, YOUR HONOR KNOWS THAT A LOT OF THIS HAS BEEN
13 WAIVED AND IS EXPIRING AND THAT'S SIMPLY BECAUSE THEY BECAME
14 A LIGHTENING ROD FOR CRITICISM OF MICROSOFT, MUCH OF WHICH
15 WAS INSTIGATED BY NETSCAPE, AND WHILE THESE CONTRACT
16 PROVISIONS WERE HELPFUL, THEY WEREN'T CRITICAL TO ANYTHING.
17 THE COMPANY ELECTED IN APRIL 1988 TO WAIVE THEM. AND THE
18 ONES THAT HAVEN'T EXPIRED EVEN SINCE THEN SOON WILL, AND
19 THEY ARE NOT BEING RENEWED. THE NEW CONTRACTS FOR ISP'S AND
20 THE WINDOWS 98 REFERRAL SERVER DO NOT CONTAIN PROVISIONS OF
21 THE TYPE THE GOVERNMENT HAS CHALLENGED. THERE WILL BE NO
22 EVIDENCE THAT MICROSOFT HAS ANY INTENTION OF ENTERING INTO
23 ADDITIONAL CONTRACTS OF THE TYPE CHALLENGED, SO THIS ISSUE
24 IS TRULY MOOT AND, THE EVIDENCE WILL SHOW, WAS MUCH ADO
25 ABOUT NOTHING IN THE FIRST PLACE.
23 - [add a note]
1 NOW I SAID I WOULD COME BACK TO AOL, WHICH IS A
2 SPECIAL SITUATION IN MANY RESPECTS. THAT IS A DISTRIBUTION
3 CONTRACT; THAT IS, AOL IS A CONSUMER HERE. THE CONTRACT
4 SPEAKS FOR ITSELF, AGAIN, AND IT BEARS EMPHASIZING THAT,
5 CONTRARY TO WHAT MIGHT HAVE BEEN IMPLIED BY THE PLAINTIFFS,
6 THIS CONTRACT IS ALSO, IN ACTUALITY, SHORT-TERM BECAUSE THE
7 PROVISIONS WITH RESPECT TO AOL'S UTILIZATION OF INTERNET
8 EXPLORER CAN BE TERMINATED AT AOL'S OPTION ON OR BEFORE
9 JANUARY 1 OF 1999, IN OTHER WORDS, TEN WEEKS FROM NOW.
10 THE EVIDENCE WITH RESPECT TO THIS AGREEMENT FROM
11 ALL SOURCES, AOL, NETSCAPE, AND MICROSOFT, WILL SHOW THAT
12 NETSCAPE AND MICROSOFT COMPETED HEAD TO HEAD TO SUPPLY WEB
13 BROWSING TECHNOLOGY TO AOL FOR INCLUSION IN WHAT JIM
14 BARKSDALE OF NETSCAPE, THE FIRST GOVERNMENT WITNESS, REFERS
15 TO AS AOL'S PROPRIETARY CLIENT. IN OTHER WORDS, NETSCAPE
16 AND MICROSOFT SOUGHT TO CONVINCE AOL TO USE THEIR RESPECTIVE
17 TECHNOLOGIES IN AOL'S PROPRIETARY BROWSING PRODUCT.
18 MICROSOFT WON THAT COMPETITION, AND THERE CANNOT BE ANYTHING
19 INSIDIOUS ABOUT THAT.
20 NOW, THE GOVERNMENT HAS AND WILL FOCUS ON ONLY ONE
21 ASPECT OF MICROSOFT'S VICTORY, THE SUPPOSEDLY HUGE
22 IMPORTANCE TO AOL OF PLACEMENT ON THE WINDOWS DESKTOP. BUT
23 THE EVIDENCE, YOUR HONOR, WILL SHOW THAT AOL WAS ALREADY
24 PRESENT ON THE WINDOWS DESKTOP BY VIRTUE OF AGREEMENTS WITH
25 LEADING COMPUTER MANUFACTURERS. ALREADY THERE.
24 - [add a note]
1 IN ADDITION, THE EVIDENCE WILL SHOW THAT THE
2 NUMBER OF SUBSCRIBERS AOL HAS OBTAINED OVER THE LAST TWO
3 YEARS BY VIRTUE OF ITS PLACEMENT IN THE ON-LINE SERVICES
4 FOLDER OF WINDOWS 95 AND WINDOWS 98 IS VERY MODEST IN
5 RELATION TO ITS TOTAL SUBSCRIBER BASE. BASED ON THE
6 TESTIMONY OF BRAD CHASE OF MICROSOFT AND EVIDENCE FROM AOL,
7 IT WILL BE CLEAR THAT AOL TOOK ITS BUSINESS TO MICROSOFT ON
8 THE MERITS, HOWEVER DEFINED, QUALITY OF TECHNOLOGY,
9 RECEPTIVENESS TO AOL'S NEEDS, ASSISTANCE WITH CUSTOMIZATION
10 AND ALLOWING AOL TO MAINTAIN ITS ONLY BRANDING.
11 THIS EVIDENCE WILL BE SUPPORTED IN FACT, AS I HAVE
12 SAID, BY EVIDENCE TO THE SAME EFFECT FROM NETSCAPE ITSELF.
13 WHEN AOL DECIDED TO BASE ITS CLIENT SOFTWARE ON MICROSOFT'S
14 TECHNOLOGY, INTERNET EXPLORER 3.0 HAD REACHED THE POINT
15 WHERE IT PROVIDED A SERIES OF MODULAR COMPONENTS THAT COULD
16 BE INTEGRATED INTO AOL'S PROPRIETARY CLIENT. NETSCAPE
17 NAVIGATOR, ON THE OTHER HAND, WAS A MONOLITHIC BLOCK OF WHAT
18 MANY REFERRED TO IN THE DOCUMENTS AS SPAGHETTI CODE THAT
19 WOULD HAVE BEEN DIFFICULT AND TIME-CONSUMING FOR AOL TO
20 CUSTOMIZE, PARTICULARLY SINCE NETSCAPE'S ENGINEERS EXPRESSED
21 LITTLE INTEREST IN ASSISTING AOL IN UNDERTAKING THAT
22 CUSTOMIZATION.
23 IN OCTOBER 1998, AS WE STAND HERE TODAY, MORE THAN
24 TWO YEARS LATER, NETSCAPE HAS YET TO RELEASE A COMPONENTIZED
25 VERSION OF ITS WEB BROWSING SOFTWARE THAT IS EASY FOR THIRD
25 - [add a note]
1 PARTIES TO INCORPORATE INTO THEIR PRODUCTS.
2 THIRD, WITH REGARD TO MICROSOFT'S LICENSE
3 AGREEMENTS WITH COMPUTER MANUFACTURERS OR OEM'S, THE
4 GOVERNMENT HAS CLEARLY FALLEN DOWN THE RABBIT HOLE. THESE
5 CONTRACTS ALSO SPEAK FOR THEMSELVES. IT IS UNDISPUTED.
6 THERE WON'T BE ANY EVIDENCE TO THE CONTRARY THAT MICROSOFT
7 DOES NOT EVEN PURPORT TO LIMIT THE ABILITY OF COMPUTER
8 MANUFACTURES TO PREINSTALL WHATEVER SOFTWARE THEY LIKE ON
9 TOP OF WINDOWS 98. IF THEY THINK IT ADDS VALUE, THAT IS
10 THEIR BUSINESS. THAT INCLUDES NETSCAPE'S WEB BROWSING
11 SOFTWARE OR ANYTHING ELSE. AND THE EVIDENCE WILL SHOW THAT
12 COMPUTER MANUFACTURES CONTINUE TO INSTALL WEB BROWSING
13 SOFTWARE ON TOP OF WINDOWS 98. IN FACT, THE NEW SONY VAIO
14 HAS FOUR DIFFERENT KINDS OF WEB BROWSING SOFTWARE INSTALLED,
15 INCLUDING NETSCAPE'S.
16 NEXT, AS THE COURT LEARNED FROM DAVID COLE BACK IN
17 JANUARY OF THIS YEAR, MICROSOFT'S LICENSE AGREEMENTS WITH
18 THE COMPUTER MANUFACTURES DO NOT EVEN PURPORT TO PREVENT
19 THEM FROM MAKING NETSCAPE'S WEB BROWSING SOFTWARE THE
20 PREFERRED OR DEFAULT BROWSER THAT IS LAUNCHED AUTOMATICALLY
21 WHEN A USER SEEKS TO ACCESS INFORMATION ON THE INTERNET.
22 MR. BOIES TALKED ABOUT AN INTEREST EXPRESSED BY A
23 SMALL NUMBER OF COMPUTER MANUFACTURES IN REMOVING THE ICON
24 ON THE WINDOWS DESKTOP THAT PROVIDED ONE MEANS OF ACCESSING
25 WEB BROWSING IN WINDOWS 95. HE DID NOT SAY, BECAUSE HE
26 - [add a note]
1 COULD NOT, THAT ANY COMPUTER MANUFACTURE EXPRESSED AN
2 INTEREST IN REMOVING INTERNET EXPLORER TECHNOLOGIES
3 THEMSELVES FROM THE OPERATING SYSTEM. AND IT IS A FAR CRY
4 FOR US TO PREVENT THE REMOVAL OF OUR ICON -- THAT IS FAR,
5 FAR DIFFERENT THAN TO ATTEMPT TO PRECLUDE THE INSTALLATION
6 OF OTHER THINGS THE OEM WANTS, INCLUDING ICONS FOR OTHER
7 SOFTWARE MANUFACTURERS.
8 MORE IMPORTANTLY, AND MOST IMPORTANTLY PERHAPS,
9 OUR LICENSE AGREEMENTS WITH THE OEM'S DO NOT IN ANY WAY
10 RESTRICT THE ULTIMATE CONSUMER'S CHOICE OF WEB BROWSING
11 SOFTWARE OR ANY OTHER SOFTWARE. THUS -- AND THIS POINT, I
12 THINK IS IMPORTANT IN LIGHT OF THE GOVERNMENT'S VIEW OF THE
13 MATTER ON THE SUMMARY JUDGMENT ARGUMENT -- OUR AGREEMENTS
14 WITH OEM'S DO NOT SEEK IN ANY SENSE TO ENLARGE UPON OR
15 EXTEND OUR LEGALLY GRANTED COPYRIGHT IN OUR OWN OPERATING
16 SYSTEM. NOR, PURSUANT TO THESE CONTRACTS OR OTHERWISE, IS
17 THERE ANY SENSE IN WHICH WINDOWS 98 IS DENIED TO ANYONE.
18 THE EVIDENCE WILL SHOW THE OPPOSITE, THAT MICROSOFT MAKES
19 HUGE QUANTITIES OF INFORMATION ABOUT ITS OPERATING SYSTEMS
20 AVAILABLE TO SOFTWARE DEVELOPERS BECAUSE IT IS IN
21 MICROSOFT'S BUSINESS INTEREST TO HAVE AS MANY PRODUCTS AS
22 POSSIBLE COMPATIBLE WITH ITS OPERATING SYSTEMS. NETSCAPE IS
23 A SIGNIFICANT BENEFICIARY OF THAT POLICY.
24 IN ADDITION TO THESE DISPOSITIVE FACTS, THE
25 RESPONSIBLE MICROSOFT EXECUTIVE, JOACHIM KEMPIN, WILL
27 - [add a note]
1 TESTIFY AS TO MICROSOFT'S EFFORTS TO MAINTAIN MUTUALLY
2 BENEFICIAL RELATIONSHIPS WITH COMPUTER MANUFACTURERS. AND
3 PAUL MARITZ WILL TESTIFY ABOUT THE VALID BUSINESS REASONS
4 FOR MICROSOFT'S SEEKING TO PRESERVE THE INTEGRITY OF ITS
5 OPERATING SYSTEMS AS THEY MOVE THROUGH THE DISTRIBUTION
6 CHANNEL INTO THE HANDS OF CONSUMERS.
7 THE CLAIM THAT PREVENTING OEM'S FROM
8 DECONSTRUCTING WINDOWS 98 PROHIBITS THEM FROM BRANDING THEIR
9 MACHINES OR DIFFERENTIATING THEM FROM THEIR COMPETITORS'
10 MACHINES WILL BE DEBUNKED BY A VIDEO DEMONSTRATION OF
11 INITIAL BOOT SEQUENCES FOR SEVERAL DIFFERENT KINDS OF
12 PERSONAL COMPUTERS. AND INTERESTINGLY, THE MOST EFFECTIVE
13 BRANDING OF THESE NEW MACHINES IS MADE POSSIBLE BY THE VERY
14 INTERNET EXPLORER TECHNOLOGIES THAT THE GOVERNMENT WANTS
15 MICROSOFT TO REMOVE FROM WINDOWS 98.
16 WE WILL ALSO PRESENT THE TESTIMONY OF JOHN ROSE OF
17 COMPAQ, THE WORLD'S LARGEST MANUFACTURER OF PERSONAL
18 COMPUTERS BY A SUBSTANTIAL MARGIN, AS TO HIS COMPANY'S LONG
19 AND PRODUCTIVE RELATIONSHIP WITH MICROSOFT. IN CONTRAST, I
20 NOTE, THE GOVERNMENT WILL PRESENT NO WITNESS FROM A COMPUTER
21 MANUFACTURER WHO LICENSES WINDOWS 98 FROM MICROSOFT; THAT
22 IS, NO WITNESS WHO IS INVOLVED IN THAT LICENSING PROCESS,
23 HAVING CHOSEN FOR SOME INEXPLICABLE REASON, TO DEVOTE 5 OF
24 ITS 12 WITNESS SLOTS TO EXPERTS, MANY OF WHOM REPEAT THE
25 SAME TESTIMONY.
28 - [add a note]
1 NOW I NOTE THAT, ENTIRELY ASIDE FROM THE
2 FOREGOING -- EVERYTHING I HAVE SAID UP TO THIS POINT -- ALL
3 OF THE CHARGES OR CLAIMS OR ALLEGATIONS THAT I HAVE THUS FAR
4 ADDRESSED, WHICH AMOUNT TO VIRTUALLY ALL OF WHAT WAS
5 ACTUALLY IN THE COMPLAINTS FILED IN MAY, WILL BE DESTROYED
6 AS WELL BY, ONE, OUR PROOF, THROUGH EVIDENCE FROM NETSCAPE
7 ITSELF AND FROM INDUSTRY DATA SOURCES, THAT NETSCAPE, FAR
8 FROM BEING FORECLOSED IN ANY SENSE OF THE WORD, HAS HAD
9 UNHINDERED ACCESS TO MORE THAN AMPLE CHANNELS OF
10 DISTRIBUTION OF ITS SOFTWARE, SO MUCH SO THAT NETSCAPE
11 ITSELF DESCRIBES ITS WEB BROWSING SOFTWARE AS UBIQUITOUS.
12 AND SECOND, THE GOVERNMENT'S COMPLETE FAILURE TO
13 PROVE THAT ANY OF THE CONTRACTS THEY ATTACK HAVE LOCKED UP A
14 SUFFICIENT PERCENTAGE OF CONSUMER DEMAND TO REQUIRE A MORE
15 EXTENSIVE ANALYSIS OF THEIR REASONABLENESS UNDER THE LAW.
16 THE EVIDENCE ON THIS POINT -- THE ABSENCE OF SUBSTANTIAL
17 FORECLOSURE -- IS EXTREMELY IMPORTANT AND COULD NOT BE
18 CLEARER. IT IS FATAL TO EACH AND EVERY ONE OF THE CLAIMS
19 ASSERTED IN THE COMPLAINTS, ALL OF WHICH DEPEND ON PROOF OF
20 SUBSTANTIAL FORECLOSURE OF COMPETITION.
21 FROM NETSCAPE'S OWN DOCUMENTS AND THE TESTIMONY OF
22 MR. BARKSDALE, MICROSOFT WILL PROVE THE FOLLOWING FACTS:
23 ONE, NETSCAPE EXPECTS TO DISTRIBUTE MORE THAN 100 MILLION
24 COPIES OF ITS WEB BROWSING SOFTWARE DURING ITS "NETSCAPE
25 EVERYWHERE" CAMPAIGN, WHICH COMES TO ROUGHLY
29 - [add a note]
1 THREE-AND-A-HALF COPIES FOR EVERY HOME USER OF THE INTERNET
2 IN THE UNITED STATES.
3 TWO, NETSCAPE ANTICIPATES THAT THE 11,000
4 PARTICIPANTS IN ITS SO-CALLED UNLIMITED DISTRIBUTION
5 CAMPAIGN WILL DISTRIBUTE BETWEEN 150 MILLION AND 170 MILLION
6 COPIES OF NETSCAPE'S WEB BROWSING SOFTWARE THIS YEAR ALONE.
7 THAT'S HALF AS MANY COPIES AS THERE ARE USERS OF THE
8 INTERNET IN THE WORLD.
9 IN MAY 1998, THE MONTH THIS CASE BEGAN, MORE THAN
10 2 MILLION COPIES OF NETSCAPE'S WEB BROWSING SOFTWARE WERE
11 ELECTRONICALLY DOWNLOADED FROM THE INTERNET. IN NETSCAPE'S
12 OWN TERMINOLOGY, THAT FIGURE SKYROCKETED TO NEARLY 4 MILLION
13 COPIES IN JUNE, AND NETSCAPE HAS PUBLICLY ANNOUNCED THAT
14 MORE THAN 12 MILLION COPIES WERE ELECTRONICALLY DOWNLOADED
15 IN JULY AND AUGUST.
16 THE EVIDENCE WILL ALSO SHOW THAT NETSCAPE HASN'T
17 BEEN LOCKED OUT OF THE SPECIFIC DISTRIBUTION CHANNELS THAT
18 ARE THE FOCUS OF THE GOVERNMENT'S CLAIMS. NETSCAPE IS ABLE
19 TO AND DOES DISTRIBUTE ITS WEB BROWSING SOFTWARE THROUGH
20 COMPUTER MANUFACTURERS, INCLUDING MAJOR OEM'S SUCH AS
21 FUGITSU, GATEWAY 2000, IBM, PACKARD BELL/NEC, AND SONY.
22 NETSCAPE ALSO IS ABLE TO AND DOES DISTRIBUTE ITS WEB
23 BROWSING SOFTWARE THROUGH THOUSANDS OF DIFFERENT ISP'S,
24 INCLUDING SOME OF THE LARGEST IN THE COUNTRY.
25 MOREOVER, AS WE WILL DEMONSTRATE, HUNDREDS OF
30 - [add a note]
1 THOUSANDS OF ICP'S HAVE "NETSCAPE NOW" BUTTONS ON THEIR WEB
2 SITES THAT ENABLE BROAD DISTRIBUTION OF NETSCAPE'S SOFTWARE
3 VIA ELECTRONIC DOWNLOADING FROM THE INTERNET. THEY ALSO
4 HAVE SUBSTANTIAL DISTRIBUTION IN A VERY, VERY SIGNIFICANT
5 CHANNEL THE GOVERNMENT DOES NOT EVEN MENTION, DIRECTLY TO
6 CORPORATE CUSTOMERS. AND THE EVIDENCE WILL SHOW THAT AS
7 MANY AS 90 PERCENT OF THE FORTUNE 1000 COMPANIES USE
8 NETSCAPE'S WEB BROWSING SOFTWARE. IN FACT, A STUDY OF WEB
9 BROWSING SOFTWARE BY ZONA RESEARCH RELEASED JUST LAST WEEK
10 STATES THAT NETSCAPE'S SHARE OF CORPORATE USAGE OF BROWSING
11 SOFTWARE HAS BEEN INCREASING IN RECENT MONTHS, A FACT THAT
12 COMPLETELY UNDERMINES THE GOVERNMENT'S CASE.
13 NOW LET ME TURN TO THE TWO FINAL COMPONENTS OF THE
14 CASE AS PLED, JAVA AND THE ALLEGED PROPOSED MARKET DIVISION
15 WITH NETSCAPE. JAVA IS REFERRED TO IN THE GOVERNMENT'S
16 COMPLAINT IN AN ALMOST INDIRECT WAY. IT'S REFERRED TO AS A
17 MOTIVATION FOR MICROSOFT TO ELIMINATE COMPETITION FROM
18 NETSCAPE OR, IF NOT ELIMINATING NETSCAPE, AT LEAST MICROSOFT
19 SEEKING DOMINANCE IN WEB BROWSING SOFTWARE. THE NOTION
20 BEING, IN PARAGRAPHS 8 AND 68 OF THE COMPLAINT, THAT
21 NON-MIRCOSOFT BROWSERS ARE PERHAPS THE MOST SIGNIFICANT
22 VEHICLE FOR DISTRIBUTION OF JAVA TECHNOLOGY OR JAVA VIRTUAL
23 MACHINES, AND WE WANTED TO STOP -- ALLEGEDLY STOP NETSCAPE
24 FROM PERFORMING THAT DISTRIBUTION FUNCTION BECAUSE JAVA, IN
25 TURN, IS CLAIMED TO POSE A THREAT TO THE WINDOWS OPERATING
31 - [add a note]
1 SYSTEM BECAUSE OF THE SUPPOSED ABILITY THAT IT OFFERS TO RUN
2 PROGRAMS ON ANY OPERATING SYSTEM WITHOUT MODIFICATION.
3 NOW, THERE ARE A FEW STARK FACTS THAT WILL SHOW
4 THAT THIS IS PURE UNADULTERATED NONSENSE. FIRST, MICROSOFT
5 IS THE WORLD'S LARGEST DISTRIBUTOR OF JAVA VIRTUAL MACHINES.
6 THEY ARE INCLUDED IN EVERY COPY OF WINDOWS 98 AND
7 WINDOWS NT, AS WELL AS IN A NUMBER OF OTHER POPULAR
8 MICROSOFT PRODUCTS. WE ARE THE LARGEST DISTRIBUTOR OF WHAT
9 WE ARE ALLEGEDLY TRYING TO CHOKE OFF NETSCAPE SO IT WON'T
10 DISTRIBUTE.
11 SECOND, MICROSOFT'S JAVA VIRTUAL MACHINE IS THE
12 FASTEST, MOST COMPATIBLE JAVA VIRTUAL MACHINE IN EXISTENCE.
13 IT IS SO GOOD, IN FACT, THAT NETSCAPE ITSELF, THE GREAT JAVA
14 DISTRIBUTOR OF THE PLAINTIFFS, HAS PUBLICLY ACKNOWLEDGED THE
15 SUPERIORITY OF MICROSOFT'S IMPLEMENTATION, AS HAVE MANY
16 INDEPENDENT REVIEWERS.
17 NOW, IN THE FACE OF THOSE TWO ABSOLUTE FACTS, THE
18 GOVERNMENT HAS SORT OF MOVED OVER TO EMPHASIZING THE CHARGE
19 THAT MICROSOFT SET ABOUT TO POLLUTE JAVA, TO DESTROY ITS
20 CROSS-PLATFORM APPEAL. NOW, AS YOUR HONOR KNOWS, THE
21 QUESTION OF CONTRACT RIGHTS BETWEEN SUN, JAVA'S DEVELOPER,
22 AND MICROSOFT, ITS LICENSEE, IS THE SUBJECT OF ANOTHER CASE
23 PENDING BEFORE ANOTHER DISTRICT COURT IN CALIFORNIA. WE
24 DON'T BELIEVE THIS POLLUTION CLAIM IS EVEN PROPERLY PART OF
25 THIS CASE. BUT LEAVING THAT ASIDE, AS A MATTER OF ANTITRUST
32 - [add a note]
1 LAW, THE POLLUTION CLAIM IS, ONCE AGAIN, NONSENSE. THE
2 EVIDENCE, INCLUDING THE TESTIMONY OF BOB MUGLIA OF
3 MICROSOFT, WILL SHOW THE JAVA VIRTUAL MACHINE IN WINDOWS
4 RUNS ANY PROGRAM WRITTEN IN SO-CALLED 100 PERCENT PURE JAVA;
5 THAT IS, JAVA AS SUN DEFINES IT FOR MARKETING PURPOSES.
6 THERE WON'T BE -- THERE IS NO WAY OF DISPUTING THAT. AND
7 THE EVIDENCE WILL SHOW IT RUNS THOSE PROGRAMS FASTER AND
8 BETTER THAN ANY OTHER JAVA VIRTUAL MACHINE, INCLUDING SUN'S
9 OWN.
10 NOW, WHAT IS THIS ALLEGED POLLUTION? SIMPLY THIS
11 AND NOTHING MORE. MICROSOFT HAS ALSO CREATED TOOLS THAT
12 ENABLE SOFTWARE DEVELOPERS TO WRITE PROGRAMS IN JAVA THAT
13 MAKE DIRECT CALLS TO WINDOWS IN ORDER TO OBTAIN NEEDED
14 FUNCTIONALITY FROM THE UNDERLYING OPERATING SYSTEM. WE RUN
15 PURE JAVA PERFECTLY, BETTER THAN ANYONE ELSE. WE HAVE
16 CREATED ADDITIONAL TOOLS SO THAT PEOPLE CAN WRITE PROGRAMS
17 IN JAVA AND ALSO CALL WINDOWS DIRECTLY. MICROSOFT HAS NOT
18 SOUGHT TO REQUIRE ANYONE TO TAKE ADVANTAGE OF THAT OPTION,
19 THE OPTION TO USE THESE TOOLS THAT WE HAVE CREATED THAT MAKE
20 DIRECT CALLS TO WINDOWS, AND SOFTWARE DEVELOPERS CREATING
21 JAVA APPLICATIONS ARE VERY WELL AWARE OF THE CONSEQUENCES OF
22 CHOOSING TO USE THOSE TOOLS.
23 PROVIDING THIS OPTION TO SOFTWARE DEVELOPERS DOES
24 NOTHING MORE THAN GIVE THEM AN ADDITIONAL COMMERCIAL CHOICE
25 THAT THEY CAN ELECT TO EXPLOIT OR NOT EXPLOIT. THAT IS THE
33 - [add a note]
1 VERY ESSENCE OF COMPETITION, PERIOD, END OF STORY. IT'S
2 AMAZING THAT THE GOVERNMENT DOESN'T ACCEPT THIS SIMPLE FACT.
3 AS TO THE ALLEGED MARKET DIVISION THAT MICROSOFT
4 SUPPOSEDLY PROPOSED TO NETSCAPE ON JUNE 21, 1995 AND WHICH
5 FEATURED SO EXTENSIVELY YESTERDAY, THE FIRST AND UNDISPUTED
6 FACT IS THAT NOTHING OF THE KIND WAS AGREED TO OR EVER
7 OCCURRED. SECOND, THE EVIDENCE WILL SHOW THAT NETSCAPE'S
8 ACCOUNT OF THAT MEETING, UNCRITICALLY ACCEPTED BY THE
9 GOVERNMENT, IS FANTASTICAL. WHETHER THAT FANTASY AROSE FROM
10 THE NAIVETE OF ITS AUTHOR, MARK ANDREESEN, AND WAS THEN
11 PROMOTED BY HIS COLLEAGUES AS A MEANS OF ENLISTING THE
12 GOVERNMENT AS NETSCAPE'S PROTECTOR IN THE COMPETITIVE BATTLE
13 WITH MICROSOFT, OR WHETHER IT WAS CONCOCTED FROM THE VERY
14 BEGINNING FOR THAT PURPOSE, WE CANNOT ESTABLISH. BUT THE
15 EVIDENCE WILL SHOW IT WAS ONE OR THE OTHER.
16 THAT EVIDENCE, ALTHOUGH CONSTRAINED BY THE
17 LIMITATION ON THE NUMBERS OF WITNESSES AT TRIAL, WILL ALSO
18 SHOW THAT NETSCAPE'S CLAIMS OF REPEATED THREATS, ACCOMPANIED
19 BY HISTRIONICS, SHOUTING, AND TABLE-POUNDING, ARE BASELESS.
20 THAT VERSION OF EVENTS IS ENTIRELY INCONSISTENT WITH WHAT
21 PRECEDED AND FOLLOWED THE JUNE 21 MEETING. AND THESE EVENTS
22 PRECEDING AND FOLLOWING JUNE 21 MAKE IT QUITE CLEAR THAT
23 MICROSOFT WAS DOING NOTHING MORE THAN EXPLORING WHETHER SOME
24 SORT OF COLLABORATIVE EFFORT WITH NETSCAPE COULD BE BOTH OF
25 MUTUAL COMMERCIAL ADVANTAGE AND OF BENEFIT TO CONSUMERS
34 - [add a note]
1 USING THE INTERNET WITH THE COMPANIES' RESPECTIVE PRODUCTS.
2 THERE WAS NO PROPOSAL BY MICROSOFT THAT NETSCAPE CEASE
3 DEVELOPMENT OF WEB BROWSING SOFTWARE FOR WINDOWS 95. THAT
4 SOFTWARE WAS FINISHED BY NETSCAPE AND PROVED TO BE ONE OF
5 THE MOST POPULAR SOFTWARE PRODUCTS IN HISTORY.
6 NOR, FAR FROM BEING THREATS OF DIRE CONSEQUENCES,
7 THERE WAS NO CESSATION OF ASSISTANCE TO NETSCAPE IN ITS WORK
8 ON THAT SOFTWARE. TO THE CONTRARY, MICROSOFT PROVIDED
9 EXTENSIVE ASSISTANCE ON THE VERSION OF NAVIGATOR DESIGNED
10 FOR WINDOWS 95 EVEN WHILE IT WAS RUSHING TO COMPLETE WORK ON
11 THE OPERATING SYSTEM ITSELF.
12 LIKEWISE, AS TO THE MARKET DIVISION PROPOSALS AND
13 THREATS ALLEGEDLY MADE BY MICROSOFT TO INTEL AND APPLE,
14 WHICH THE GOVERNMENT CLAIMS ARE RELEVANT UNDER RULE 404(B)
15 TO SHOW MICROSOFT'S INTENT AT THE JUNE 1995 NETSCAPE
16 MEETING AND CLAIMS ARE RELEVANT TO SHOW THE SUPPOSED
17 EXISTENCE OF MICROSOFT'S MONOPOLY POWER, THOSE PROPOSALS AND
18 THREATS CLAIMED BY THE GOVERNMENT WILL LIKEWISE BE SHOWN BY
19 THE EVIDENCE, INCLUDING THE TESTIMONY OF PAUL MARITZ, AND
20 ERIC ENGSTROM OF MICROSOFT, TO HAVE BEEN GARDEN-VARIETY
21 COMMERCIAL DISCUSSIONS BETWEEN COMPANIES DEVELOPING
22 COMPLEMENTARY PRODUCTS, DISCUSSIONS OF NO ANTITRUST
23 CONSEQUENCE.
24 I SAID AT THE OUTSET THAT MICROSOFT DEVELOPS
25 PRODUCTS COMPLEMENTARY WITH THOSE OFFERED BY BOTH INTEL AND
35 - [add a note]
1 APPLE. AS A RESULT, CASTING THOSE COMPANIES AS MICROSOFT'S
2 COMPETITORS IN ALL CIRCUMSTANCES IS BOTH SIMPLISTIC AND
3 MISLEADING. DESPITE THE SUGGESTION MADE YESTERDAY,
4 COMPETITION ON THE MERITS IN THE SOFTWARE INDUSTRY OFTEN
5 INVOLVES EFFORTS TO ATTRACT THE ATTENTION OF COMPANIES THAT
6 DEVELOP PRODUCTS COMPLEMENTARY WITH YOUR OWN. IMPLICIT IN
7 SUCH EFFORTS IS URGING YOUR PROSPECTIVE PARTNER NOT TO ALLY
8 WITH YOUR PRINCIPAL COMPETITORS. YOU WANT HIM TO SUPPORT
9 YOUR TECHNOLOGY, NOT THEIRS.
10 THIS TALK OF MARKET DIVISION AND THREATS
11 PURPORTEDLY EVIDENCING MONOPOLY POWER LEADS ME TO MARKET
12 DEFINITION AND THE INABILITY OF MICROSOFT TO RAISE PRICES OR
13 EXCLUDE COMPETITION FROM ANY PROPERLY-DEFINED MARKET WHICH
14 IS THE DEFINITION OF MONOPOLY POWER UNDER THE LAW.
15 THE COURT: BEFORE YOU GET INTO MARKET DEFINITION,
16 WOULD THIS BE AN APPROPRIATE TIME FOR THE MORNING RECESS?
17 MR. WARDEN: YES, YOUR HONOR. IT SURELY WOULD.
18 THE COURT: TEN MINUTES.
19 (A RECESS WAS TAKEN.)
20 (AFTER RECESS.)
21 MR. WARDEN: AS I SAID, YOUR HONOR, I WILL NOW
22 TALK ABOUT MARKET DEFINITION AND ALLEGATIONS OF MONOPOLY
23 POWER. AS TO MARKETS, THE EVIDENCE FROM BOTH BUSINESS
24 PEOPLE AND EXPERTS WILL SHOW THAT THE DRAWING OF HARD AND
25 FAST LINES BETWEEN SEPARATELY IDENTIFIABLE PRODUCT MARKETS
36 - [add a note]
1 IN THE SOFTWARE BUSINESS IS NOT JUST DIFFICULT, BUT IS
2 IMPOSSIBLE.
3 AS THE COURT IS WELL AWARE, SOFTWARE IS COMPRISED
4 OF LINES OF CODE THAT TELL A COMPUTER WHAT TO DO. THERE IS
5 AN INFINITE VARIETY OF WAYS IN WHICH SUCH INSTRUCTIONS CAN
6 BE ARRANGED.
7 NOW, IT MAY BE EASY TO SAY AND PERHAPS GENERALLY
8 CORRECT IN SOME SENSE THAT SOME PIECES OF SOFTWARE
9 CONSTITUTE PLATFORMS, SUCH AS OPERATING SYSTEMS, AND SOME
10 PIECES OF SOFTWARE CONSTITUTE APPLICATIONS THAT RUN ON TOP
11 OF SUCH PLATFORMS. AND THERE EXAMPLES WOULD BE WORD
12 PROCESSORS OR SPREADSHEETS. NO SUCH CATEGORIZATION CAN BE
13 EXPECTED TO BE ENTIRELY TRUE, EVEN IN THE SHORT RUN. AND AS
14 AN EXAMPLE OF THAT, MICROSOFT OFFICE, WHICH IS WIDELY
15 REGARDED AS A COLLECTION OF BUSINESS PRODUCTIVITY
16 APPLICATIONS, IS ALSO A PLATFORM IN THE SENSE THAT
17 VALUE-ADDED RESELLERS AND SO-CALLED SYSTEM INTEGRATERS,
18 BUILD SPECIALIZED LINE-OF-EVIDENCE SOLUTIONS ON TOP OF SOME
19 OF THE APPLICATIONS IN OFFICE LIKE EXCEL AND WORD.
20 THE EVIDENCE WILL SHOW, HOWEVER, THAT ONE THING IS
21 CERTAINLY TRUE. THE GOVERNMENT CANNOT DRAW A LINE AROUND,
22 QUOTE, OPERATING SYSTEMS FOR INTEL-BASED PC'S, CLOSE QUOTE,
23 AND CALL THAT A MARKET FOR ANTITRUST LAW PURPOSES. PERSONAL
24 COMPUTERS ARE LINKED TOGETHER BY LAN SERVERS (LOCAL AREA
25 NETWORK SERVERS), WAN SERVERS (WIDE AREA NETWORK SERVERS),
37 - [add a note]
1 INTRANET SERVERS WITHIN AN ENTERPRISE, AND INTERNET SERVERS,
2 ALL OF WHICH HAVE THEIR OWN OPERATING SYSTEMS, AND THUS,
3 TECHNOLOGY COMPETITIVE WITH P.C. OPERATING SYSTEMS.
4 THERE IS ALSO A REMARKABLE FLEXIBILITY IN HARDWARE
5 CHOICE AND SUBSTITUTION THAT MAKES THIS POINT EVEN CLEARER.
6 WHAT ONE COMPANY USES PERSONAL COMPUTERS TO DO, ANOTHER CAN
7 USE HAND-HELD PERSONAL DIGITAL ASSISTANCE TO DO, ANOTHER CAN
8 USE APPLE MACS TO DO, ANOTHER CAN USE WORK STATIONS RUNNING
9 UNIX TO DO, ANOTHER CAN USE NETWORK COMPUTERS ATTACHED TO A
10 SERVER TO DO AND, FINALLY, YOU CAN USE DUMB TERMINALS
11 CONNECTED TO A MAINFRAME COMPUTER TO DO THE SAME THINGS.
12 THESE ARE ALL VIABLE OPTIONS FROM THE PERSPECTIVE
13 OF CUSTOMERS SEEKING COMPUTING SOLUTIONS AND THAT IS, OF
14 COURSE, WHAT CUSTOMERS SEEK. THE SOLUTION SOUGHT MAY VARY
15 FROM CUSTOMER TO CUSTOMER.
16 NOW, WITH RESPECT TO THE ALLEGATION THAT MICROSOFT
17 POSSESSES MONOPOLY POWER IN THIS PURPORTED MARKET -- WHICH
18 WE CONTEND IS CLEARLY NOT A MARKET -- THE EVIDENCE WILL SHOW
19 THAT NO SUCH POWER IN ANY TRADITIONAL ECONOMIC SENSE DOES OR
20 CAN EXIST.
21 FIRST, THERE ARE NO STRUCTURAL BARRIERS TO ENTRY.
22 NO FACTORIES TO BUILD, NO MINERAL DEPOSITS TO LOCATE, AND NO
23 DISTRIBUTION INFRASTRUCTURE TO DEVELOP.
24 SECOND, THERE ARE LITERALLY NO CONSTRAINTS ON
25 OUTPUT ONCE A SOFTWARE PRODUCT, INCLUDING AN OPERATING
38 - [add a note]
1 SYSTEM, HAS BEEN DEVELOPED. YOU DON'T HAVE TO GO BUILD
2 ANOTHER BILLION-DOLLAR FACTORY TO TURN OUT MORE TIRES. IT
3 DOESN'T WORK THAT WAY. AND MARGINAL COSTS OF PRODUCTION ARE
4 CLOSE TO ZERO.
5 ON THE BASIS OF THESE FUNDAMENTAL ECONOMIC
6 CONSIDERATIONS, THE SOFTWARE BUSINESS IS AND ALWAYS WILL BE
7 HIGHLY COMPETITIVE. THE ASSETS REQUIRED TO CREATE OPERATING
8 SYSTEMS, LIKE OTHER SOFTWARE, ARE TWO-FOLD: HUMAN BRAINS
9 AND THE CAPITAL TO SUPPORT THOSE HUMAN BRAINS WHILE THEY
10 WORK. SUPPLY OF BOTH OF THOSE ASSETS IS EXTENSIVE. THEY
11 ARE FREELY AND ABUNDANTLY AVAILABLE. AS LINUS TORVALDS, THE
12 CREATOR OF THE LINUX OPERATING SYSTEM HAS SHOWN, ONE PERSON
13 IN HELSINKI, FINLAND CAN QUICKLY WRITE THE CORE OF A
14 SOPHISTICATED OPERATING SYSTEM THAT IS NOW USED BY MILLIONS
15 OF PEOPLE.
16 AS I ALLUDED EARLIER, COMPETITION IN OPERATING
17 SYSTEMS IS BASED ON TECHNOLOGICAL INNOVATION. IN PRODUCT
18 COMMERCIALIZATION, AS IS TRUE OF ANY HIGH-TECH INDUSTRY, YOU
19 HAVE GOT TO DO THE CREATIVE WORK. YOU HAVE GOT TO TURN IT
20 INTO A USABLE PRODUCT AND FINALLY MARKET IT. AND YOU DO NOT
21 HAVE TO HAVE BILLIONS OF DOLLARS IN ASSETS TO GET INTO THE
22 GAME.
23 ANY COMPETITIVE POSITION CAN BE LOST OVERNIGHT IF
24 SOMEONE ELSE CREATES A TECHNICALLY SUPERIOR OR MORE
25 USER-FRIENDLY PRODUCT. THERE ARE THINGS THAT ENGINEERS MAY
39 - [add a note]
1 VIEW AS ELEGANT THAT ORDINARY PEOPLE DON'T LIKE, AND VICE
2 VERSA. BUT IF YOU GET IT RIGHT -- IF YOU GET TO THE
3 CONSUMER THE PERFORMANCE THE CONSUMER WANTS IN A WAY THAT IS
4 EASIER FOR HIM TO USE, YOU HAVE THE BETTER MOUSETRAP.
5 THE SUPPOSED LOCK-IN EFFECTS THAT YOU HAVE SEEN
6 REFERENCE TO THAT THE GOVERNMENT POSITS ARE THUS
7 EPHEMERAL -- IF SUCH LOCK-IN EFFECTS EXISTED, IT WOULD HAVE
8 BEEN IMPOSSIBLE FOR MICROSOFT TO MAKE A DENT IN NETSCAPE'S
9 COMMANDING LEAD IN WEB-BROWSING SOFTWARE, A POINT THE
10 GOVERNMENT'S ECONOMIC EXPERTS IGNORE.
11 AS I SAID EARLIER, MICROSOFT OR ANY OTHER LEADING
12 FIRM IN THE SOFTWARE BUSINESS MUST CONSTANTLY INNOVATE TO
13 REMAIN VIABLE IN EACH SUCCEEDING ROUND OF COMPETITION, AND
14 THE PACE OF THAT COMPETITION IS EXTRAORDINARILY RAPID. THIS
15 IS NO COMFORTABLE AND QUIET MONOPOLY BACKWATER.
16 OEM'S HAVE ALTERNATIVES. THEY HAVE THEM TODAY,
17 AND THERE WILL BE PLENTY OF EVIDENCE AS TO WHAT THEY ARE.
18 THEY INSTALL WINDOWS BECAUSE THAT'S WHAT THEIR CUSTOMERS
19 WANT. AND THEY, THE OEM'S, ARE DEMAND-DRIVEN ENTERPRISES IN
20 A HIGHLY COMPETITIVE BUSINESS.
21 MICROSOFT HASN'T DENIED CONSUMER CHOICE. IT IS
22 CONSUMER CHOICE. ALTHOUGH I DO NOT AND CERTAINLY COULD NOT
23 PURPORT TO BE AMONG EVEN THE MORE TECHNICALLY ADEPT PEOPLE
24 IN THIS ROOM TODAY, I KNOW -- AND I AM SURE MY EXPERIENCE IS
25 THE SAME AS THE COURT'S -- OF NO OTHER AREA OF TECHNOLOGY
40 - [add a note]
1 THAT HAS MOVED AS FAST IN THE LAST TWENTY YEARS AS
2 COMPUTING.
3 AT SULLIVAN & CROMWELL IN 1978 -- AND I THINK OUR
4 EXPERIENCE IS TYPICAL AND GENERAL IN THIS RESPECT -- WE HAD
5 VIDEX MACHINES FOR WORD PROCESSING. PEOPLE THOUGHT THEY
6 WERE GOING TO BE AROUND FOREVER, THEY WERE SO GREAT. THEY
7 WERE LARGE BOXES WITH A LOT OF BLINKING LIGHTS THAT ONLY A
8 FEW PEOPLE IN THE WORD PROCESSING DEPARTMENT UNDERSTOOD HOW
9 TO USE.
10 THOSE MACHINES WERE REPLACED BY IBM DISPLAY
11 WRITERS, ANOTHER GREAT ADVANCE THAT LOOKED LIKE IT WAS THERE
12 FOREVER. THESE WERE COMPUTERS DEDICATED TO THE SINGLE TASK
13 OF WORD PROCESSING. ALL THE SECRETARIES HAD THEM. IN A FEW
14 SHORT YEARS, THOSE TOO WERE OBSOLETE, AND THEY HAD TO BE
15 REPLACED BY PC'S THAT COULD RUN A NUMBER OF DIFFERENT
16 APPLICATIONS, INCLUDING WORD PROCESSING. THEY WERE USED
17 BOTH BY SECRETARIES AND YOUNGER LAWYERS.
18 RECENTLY WE SWITCHED OUR OFFICE TO WINDOWS 95 AND
19 GRAPHICAL WORD PROCESSING SOFTWARE THAT ALMOST EVERYONE IN
20 THE FIRM USES, ALTHOUGH THERE ARE A FEW OF US, INCLUDING
21 MYSELF, WHO STILL USE FOUNTAIN PENS AND LEGAL PADS.
22 MY POINT IS THIS. CONTRARY TO THE GOVERNMENT'S
23 SUBMISSION, THE EVIDENCE WILL SHOW THAT CONSUMERS ADOPT NEW
24 TECHNOLOGIES THEY REGARD AS SUPERIOR EVEN IF THAT REQUIRES
25 THEM TO SCRAP WHAT THEY ALREADY HAVE AND LEARN SOMETHING
41 - [add a note]
1 NEW.
2 NOW ANOTHER THING THE COURT, I AM SURE, HAS AT
3 LEAST IN THE BACK OF YOUR HONOR'S MIND, BUT YOU HAVE TO
4 BRING TO THE FRONT AND BEAR IN MIND, IS THAT SOFTWARE NEVER
5 WEARS OUT. AS PAUL MARITZ WILL TESTIFY, THAT PUTS MICROSOFT
6 IN COMPETITION WITH ITSELF.
7 CONSUMERS WILL NOT GO OUT AND GET THE LATEST AND
8 GREATEST OPERATING SYSTEM FROM MICROSOFT, UNLESS THEY SEE IT
9 AS A SUBSTANTIAL IMPROVEMENT ON WHAT THEY ALREADY HAVE.
10 UNLIKE A MONOPOLIST, MICROSOFT MUST CONSTANTLY
11 INNOVATE JUST TO SELL NEW PRODUCTS AT ALL BEYOND THE
12 DIMENSIONS OF MARKET GROWTH ITSELF. AND EVEN THAT MARKET
13 GROWTH IS, IN TURN, PARTIALLY DEPENDENT ON INNOVATION TO
14 SPUR DEMAND. DEMAND HAS GREATLY INCREASED AS THE
15 FUNCTIONALITIES PROVIDED HAVE GREATLY INCREASED.
16 IT'S NOT JUST A QUESTION OF PRICE REDUCTION. IT'S
17 NOT JUST A QUESTION OF RISING STANDARDS OF LIVING IN OTHER
18 PARTS OF THE GLOBE. IT'S A QUESTION OF ACTUALLY PROVIDING
19 NEW PRODUCTS THAT MAKE MORE PEOPLE WANT TO HAVE THAT KIND OF
20 A PRODUCT.
21 THAT NEED TO GENERATE ADDITIONAL DEMAND IS ONE OF
22 THE REASONS WHY MICROSOFT ADDED SUPPORT FOR INTERNET
23 STANDARDS IN THE FORM OF INTERNET EXPLORER TECHNOLOGIES TO
24 WINDOWS 95. THEY WANTED TO MAKE PERSONAL COMPUTING
25 APPEALING TO A BROADER RANGE OF PROSPECTIVE PURCHASERS.
42 - [add a note]
1 NOW I AM GOING TO LEAVE OPERATING SYSTEMS AND GO
2 TO THE OTHER ALLEGED MARKET, BROWSERS. THAT, TOO, CANNOT
3 PASS MUSTER UNDER ANY SENSIBLE TEST FOR MARKET DELINEATION.
4 YES, PEOPLE WANT WEB-BROWSING FUNCTIONALITY -- AT LEAST A
5 LOT OF PEOPLE DO -- BUT THAT IS BUT ONE OF A LARGE NUMBER OF
6 FEATURES THEY WANT IN A COMPUTER.
7 THE EVIDENCE WILL SHOW THAT THE INCLUSION OF THIS
8 FUNCTIONALITY, LIKE OTHERS IN OPERATING SYSTEMS, IS A
9 NATURAL EVOLUTION IN THE PROCESS OF PROVIDING ACCESS TO MORE
10 AND MORE SOURCES OF INFORMATION -- NO DIFFERENT IN PRINCIPLE
11 FROM WHEN SUPPORT FOR CD-ROMS OR TAPE BACK-UP DRIVES WAS
12 ADDED TO OPERATING SYSTEMS.
13 THIS IS CONFIRMED BY THE FACT THAT EVERY MAJOR
14 VENDOR OF OPERATING SYSTEM SOFTWARE INCLUDES WEB-BROWSING
15 SOFTWARE WITH ITS PRODUCT OFFERING. THUS, THE POINT I WANT
16 TO MAKE HERE IS THAT THE GOVERNMENT SAYS THERE ARE TWO
17 MARKETS: OPERATING SYSTEMS AND BROWSERS. THE FACT OF THE
18 MATTER IS, ASSUMING THEY WERE A BROWSER MARKET, THE EVIDENCE
19 WILL SHOW THAT DEMAND IN THAT MARKET THAT THE GOVERNMENT
20 CLAIMS IS A MARKET FOR BROWSING CAN BE SATISFIED BY SUPPLY
21 IN WHAT IT CALLS ANOTHER MARKET, OPERATING SYSTEMS, BECAUSE
22 THERE CAN BE STAND-ALONE BROWSERS AND THERE CAN BE OPERATING
23 SYSTEMS THAT SUPPLY BROWSING FUNCTIONALITY, ALONG WITH THE
24 MYRIAD OTHER FUNCTIONALITIES THAT THEY SUPPLY.
25 BEFORE LEAVING THIS SUBJECT, LET ME REPEAT THAT
43 - [add a note]
1 THE EVIDENCE WILL SHOW THAT THE GOVERNMENT'S CHARGES
2 CONCERNING THE ALLEGED BROWSER MARKET REALLY TURN ANTITRUST
3 LAW ON ITS HEAD. BY THE GOVERNMENT'S OWN ACCOUNT, NETSCAPE,
4 THE OBJECT OF PROTECTION IN THIS CASE, HAD, BASED ON ITS
5 SHARE OF USAGE, WHAT THE GOVERNMENT APPARENTLY WOULD REGARD
6 AS A MONOPOLY IN WEB-BROWSING SOFTWARE, UNTIL THE GREAT
7 SATAN, MICROSOFT, CAME ALONG.
8 ACCORDING TO THE ACADEMIC THEORIES OF TIPPING AND
9 NETWORK EFFECTS THAT THE GOVERNMENT ESPOUSES, THAT POSITION
10 WOULD QUICKLY HAVE BECOME -- INDEED, ALREADY SHOULD HAVE
11 BEEN IMPREGNABLE. LUCKILY FOR THE CONSUMING PUBLIC, THOSE
12 THEORIES ARE JUST THAT, THEORIES.
13 ANTITRUST LAW PROTECTS COMPETITION, NOT PARTICULAR
14 COMPETITORS. AND IT IS DIFFICULT TO SEE HOW COMPETITION IN
15 BROWSERS WOULD BE MORE ROBUST IF MICROSOFT HAD NOT DEVELOPED
16 INTERNET EXPLORER TECHNOLOGIES, INTEGRATED THEM INTO WINDOWS
17 95 AND 98, ACTIVELY MARKETED THEM THROUGH PROMOTIONAL
18 AGREEMENTS, MADE THEM AVAILABLE TO THIRD-PARTY SOFTWARE
19 DEVELOPERS, SUPPLIED THEM TO AOL AS THE BASIS FOR ITS CLIENT
20 SOFTWARE, AND IMPROVED THEM AT A FURIOUS PACE.
21 THE GOVERNMENT, APPARENTLY, WOULD HAVE PREFERRED
22 MICROSOFT TO LEAVE NETSCAPE IN AN UNCHALLENGED POSITION AS A
23 POTENTIAL COLLECTOR OF MONOPOLY RENTS. INDEED, YOUR HONOR
24 WILL HEAR IN THE EVIDENCE THAT NETSCAPE ORIGINALLY SUPPLIED
25 ITS WEB-BROWSING SOFTWARE FOR FREE AND CONTINUED TO DO SO
44 - [add a note]
1 UNTIL IT THOUGHT IT HAD AN ABILITY, BASED ON ITS DOMINANT
2 SHARE OF USAGE, TO GOUGE CONSUMERS BY CHARGING THEM $39.00 A
3 COPY. NOW AS A RESULT OF MICROSOFT'S COMPETITION,
4 NETSCAPE'S WEB BROWSER IS AGAIN FREE. THE UNDISPUTED VICTOR
5 IN THE SO-CALLED BROWSING WAR HAS BEEN THE CONSUMING PUBLIC.
6 IN CONCLUSION, LET ME SAY THAT WE FIRMLY BELIEVE
7 THE COURT WILL CONCLUDE, AFTER HEARING ALL THE EVIDENCE,
8 THAT THIS IS NOT REALLY AN ANTITRUST CASE BUT A RETURN OF
9 THE LUDDITES, THE 19TH CENTURY REACTIONARIES, WHO, FEARFUL
10 OF COMPETITION, WENT AROUND SMASHING MACHINES WITH
11 SLEDGEHAMMERS TO ARREST THE MARCH OF PROGRESS DRIVEN BY
12 SCIENCE AND TECHNOLOGY.
13 THE GOVERNMENT'S CASE IS A REPUDIATION OF THE
14 BASIC PRINCIPLE IN OUR SOCIETY THAT CREATIVE COMMERCIAL
15 ACTIVITY SHOULD BE ENCOURAGED AND REWARDED. THAT PRINCIPLE
16 HAS PRODUCED FOR THIS NATION ECONOMIC PROSPERITY AND
17 ASSOCIATED INDIVIDUAL LIBERTY UNPARALLELED IN HUMAN HISTORY.
18 NOW, WHETHER THIS CASE ARISES FROM ELECTORAL
19 POLITICS, FROM THE PRESSURE OF ACADEMICS SEEKING JUDICIAL
20 ACCEPTANCE OF NEW FORMS OF SOCIAL ENGINEERING, OR FROM
21 PRESSURE BY MICROSOFT'S MANY COMPETITORS, WHO WRONGLY THINK
22 CONSUMERS WOULD BENEFIT FROM LESS VIGOROUS COMPETITION, THE
23 GOVERNMENT'S CASE IS A FUNDAMENTALLY MISCONCEIVED ATTACK ON
24 THE CREATION OF INNOVATIVE NEW PRODUCTS BY OPERATION OF THE
25 FREE MARKET. THAT IS AN ATTACK ON THE VERY CREATION OF THE
45 - [add a note]
1 INTERSTATE AND FOREIGN COMMERCE OF THE UNITED STATES SOUGHT
2 TO BE ADVANCED BY THE COMMERCE CLAUSE OF THE CONSTITUTION
3 AND PROTECTED BY THE SHERMAN ACT.
4 THANK YOU, YOUR HONOR.
5 THE COURT: THANK YOU.
6 WE'LL TAKE OUR NOONTIME RECESS AND RECONVENE AT
7 2:00 O'CLOCK.
8 (WHEREUPON, AT 11:57 P.M., THE ABOVE-ENTITLED
9 MATTER WAS RECESSED FOR LUNCH.)
12 CERTIFICATE OF REPORTER
13 THIS RECORD IS CERTIFIED BY THE UNDERSIGNED REPORTER
14 TO BE THE OFFICIAL TRANSCRIPT OF THE PROCEEDINGS INDICATED.
15 ______________________________
16 PHYLLIS MERANA