Gateway, Red Hat Execs Slam Microsoft Plan

A former executive at Gateway Inc. and another from Red Hat testified that computer makers are still afraid to offer an alternative to Microsoft's Windows operating system, and that Microsoft still dictates how they configure the machines they sell.

Nine states are seeking stiffer antitrust sanctions against Microsoft and 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.

Red Hat Chief Technology Officer Michael Tiemann told U.S. District Judge Colleen Kollar-Kotelly that computer makers had rebuffed his attempts in recent years to pre-install the Linux operating system on their machines because of fears that Microsoft would retaliate.

Red Hat is a distributor of the Linux operating system, software originally developed in Finland and updated by programmers around the world under its open source status.

Tiemann said computer makers were often uncomfortable during sales visits because of concerns about how Microsoft would react. "It was as if a skunk had come into the room," Tiemann told the judge.

Kollar-Kotelly expressed reluctance to consider the allegation of Microsoft intimidation in Tiemann's written testimony, as she has with some of the other testimony presented by the dissenting states. When Tiemann voiced the accusation in open court, she ruled it inadmissible.

Tiemann, along with former Gateway executive Peter Ashkin, both testified on behalf of the nine states that are asking for stiffer sanctions against Microsoft for violations of antitrust law.

Ashkin told Kollar-Kotelly that even though the settlement with the U.S. Justice Department "purports" to give PC makers more flexibility to feature rival software on their machines, it would do little, if anything, to change Microsoft's behavior.

Ashkin, who left computer maker Gateway last year for a position at Microsoft rival AOL Time Warner said restrictive contracts that Microsoft imposes on computer makers "remain the centerpiece of its efforts to entrench its operating system monopoly."

But under questioning from Microsoft attorney Richard Pepperman, Ashkin conceded that he had only worked directly with Microsoft for a year while at Gateway, and that there were no documents to support his claim that Microsoft had used its Windows monopoly to threaten Gateway.

And despite AOL's history of competition with Microsoft and AOL'S own antitrust suit against the software titan, Ashkin seemed unaware of the rivalry. "I don't know whether or not (AOL executives) have official views on the case," he said.

Tiemann, appearing later in the day, told the judge that Linux cannot provide an alternative to Windows unless it works well with Microsoft's Office and Internet Explorer software. But he said Microsoft had not disclosed enough about how those programs worked to allow that to happen.

He also accused Microsoft of trying to dominate the market for network computing by making sure competitors' Internet server software doesn't work well with either Windows or with its own server software.

"A strong remedy is necessary to unfetter the market from Microsoft's grasp as it employs every means at its disposal to harm competitors and perpetuate its monopoly," Tiemann said.

Last June, a federal appeals court threw out some of the charges against Microsoft but upheld a lower court ruling that the company had illegally maintained its Windows software monopoly in personal computer operating systems.

The proposed settlement would require Microsoft to give computer makers like Gateway more freedom to feature non-Microsoft software on their machines. It also bars Microsoft from retaliating against computer makers.

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

The objecting states are proposing more stringent sanctions, including one that would require Microsoft to sell a "modular" version of Windows that would allow computer makers to strip out add-on "middleware" features like the Internet Explorer browser, or Microsoft's media player.

The states' proposal also would force Microsoft to disclose more about its software and license its browser to other companies royalty-free.

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

Shares of Microsoft rose in line with the Nasdaq composite index on Thursday, gaining $1.26, or 2.1 percent, to $61.36.

The hearings are due to resume Monday.

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