RealNetworks Tells Judge It Was A Microsoft Target

In written testimony to U.S. District Judge Colleen Kollar-Kotelly, RealNetworks Vice President David Richards said that, as recently as August last year, a senior Microsoft executive had confirmed RealNetworks was seen as a threat.

Richards said Microsoft withheld technical data from RealNetworks to ensure that RealNetworks' audio and video player would not work as well with Microsoft's Windows operating system as the Windows Media Player.

The RealNetworks executive was the third witness called by a group of nine states seeking tougher sanctions against Microsoft for violations of antitrust law.

The states, including California, Iowa and Connecticut, have rejected a proposed settlement of the nearly four-year-old case reached last November with the U.S. Justice Department and nine other states.

But before Richards could testify, Kollar-Kotelly agreed with a request from Microsoft to reject parts of his testimony and exhibits, which aimed to show Microsoft had forced computer makers to back away from agreements to install RealNetworks media players in machines they sold.

The judge called those parts of Richards' testimony "classic hearsay."

Included in the rejected material was an e-mail that suggested computer maker Gateway feared retaliation by Microsoft if it went ahead with a contract to place Real software on Gateway machines, according to a source familiar with the material.

"[They will put us out of business," says an e-mail account about the 1999 contract negotiations exchanged between RealNetworks executives, the source said.

But much of Richards 90 pages of testimony was allowed.

Seen As Threat

Richards said that, in August last year, Microsoft Vice President Jim Allchin informed RealNetworks that Microsoft believed its own rival product, called Windows Media Player, was part of the Windows operating system and RealNetworks was therefore a platform competitor.

"I do not think there is any question that Microsoft has sought, and continues to seek, to restrict the distribution, promotion, use and interpretability of RealNetworks," Richards wrote.

In the hearings, which are expected to last up to two months, the states are trying to make a case for stronger remedies to stop Microsoft from spreading its dominance to new technologies like media players, hand-held devices and interactive television controllers.

The states are proposing that Microsoft sell a "modular" version of Windows that would allow computer makers to strip out add-on features like the Internet Explorer browser, or Microsoft's media player. They also would force Microsoft to disclose more about its software and license its browser to other companies royalty-free.

Microsoft is arguing that the remedies suggested by the dissenting states are extreme and that any sanctions should be confined to specific findings upheld by a federal appeals court.

The proposed settlement of the government case is designed to remedy the antitrust violations by giving computer makers more freedom to feature rival software on their products, among other things.

Judge Kollar-Kotelly is considering the proposed settlement under a separate proceeding.

Copyright 2002 Reuters Limited. All rights reserved.

Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.

Reuters shall be not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.