Microsoft Says Disclosures Could Help Hackers; New Witness For States

Kenneth G. Elzinga, testifying as an expert witness for Microsoft, said many of the penalties proposed by the states are unrelated to the violations of antitrust law that a federal appeals court found and appear designed more to protect Microsoft's competitors than consumers.

The nine states refused to go along with a settlement the Justice Department reached with Microsoft last year. Among other things, they want the company to release a version of its Windows operating system that will permit computer manufacturers to replace Microsoft features with competing products.

But Elzinga said that proposal would "essentially eliminate, or at least cripple" Windows. Other penalties proposed by the states, he said, "will reduce Microsoft's incentives to innovate, will raise its costs of production and will prevent it from engaging in activity that tends to lower prices and improve quality."

Elzinga is one of Microsoft's final witnesses as the software giant wraps up its defense against the states' request for tougher penalties.

Jim Allchin, who oversees Windows for Microsoft, testified Tuesday that hackers, virus writers and software pirates could run rampant if Microsoft disclosed the technical product information that the nine states have requested.

Allchin said such disclosures "would make it easier for hackers to break into computer networks, for malicious individuals or organizations to spread destructive computer viruses and for unethical people to pirate" Microsoft's flagship software.

The states want the disclosures so competitors' software can work as well with Windows as Microsoft's own products. The overwhelming market share of Windows gives Microsoft a leg up on other software makers, they say.

A lawyer for the states, Kevin Hodges, pointed out that many of the most destructive computer attacks in recent years have targeted Microsoft products regardless of whether Microsoft disclosed particular technical data.

"I guess it's a matter of how hard you make it,' Allchin replied. "We have to work on our reputation for security in the marketplace."

The states gained new hope Tuesday when the judge overseeing the case agreed to let them present more information on their demand that Microsoft release a "modular" version of Windows.

Lawyers for the states asked U.S. District Judge Colleen Kollar-Kotelly to allow them to call an extra witness to show that such a version of Windows is feasible, despite Microsoft's objections.

Kollar-Kotelly berated the states for the late request, calling it an ill-conceived "tactical decision." Nevertheless, she decided to let the witness, independent software tester James Bach of Front Royal, Va., testify.

"I think that the information should be submitted to the court, that I should have it," Kollar-Kotelly said.

States' lawyer Steven Kuney said Bach will argue that Microsoft's XP Embedded operating system shows that Microsoft can make a modular version of Windows. XP Embedded is designed for small, limited-function devices like cash registers and automatic teller machines.

Many Microsoft witnesses, including chairman Bill Gates, say Microsoft is unable to make a modular Windows because the different features--like the Internet browser and media player--are dependent on each other.

Microsoft earlier specifically targeted the penalty proposal in a motion that asked the judge to dismiss it. She has not ruled on the request.

Bach's testimony, which includes a video, will come after Microsoft rests its case next week. The states finished their case in April, and Kollar-Kotelly was reluctant to let the states add on another witness.

The original judge in the antitrust case ordered Microsoft broken into two companies after concluding that it illegally stifled competitors. An appeals court upheld many of the violations but reversed the breakup order and appointed Kollar-Kotelly to determine a new punishment.

States that rejected the government's settlement with Microsoft last fall and are pressing for tougher penalties are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.

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