Palm, Gateway to Testify Against Microsoft

The states, who have refused to sign on to a settlement between Microsoft and the U.S. Justice Department, listed executives from the two companies among more than a dozen witnesses they plan to call during hearings set to begin March 11 on what sanctions should be imposed on Microsoft, according to pre-trial statements filed with U.S. District Judge Colleen Kollar-Kotelly.

Anthony Fama, a group counsel for Gateway, will testify "that the states' proposed remedy is necessary to prevent Microsoft from continuing to favor personal computer manufacturers who support Microsoft's products, to the disadvantage of personal computer manufacturers who do not," the dissenting states said in their court filing.

"[Fama will testify that Microsoft's Proposed Remedy does not prohibit this behavior," the states said.

In addition, Michael Mace, chief competitive officer of Palm, will testify that Microsoft "has attempted to block Palm's development through anti-competitive actions such as blocking access to Microsoft's development tools," the dissenting states said.

"Fails to Address Concerns"

Mace will also testify that the states' proposed sanctions are "critical to ensure that Palm can continue to interoperate with Microsoft's Windows platform in the future" and that the Justice Department settlement "fails to address Palm's concerns," the states said in their pre-trial statement.

Microsoft has repeatedly criticized the states' proposed sanctions as radical and harmful to consumers, and said in its pre-trial statement it will call its own witnesses, including many company executives, to make that case.

The software giant reached the deal with the Justice Department in November after an appeals court in June upheld a lower court conclusion that Microsoft had used illegal tactics to maintain its Windows monopoly.

The settlement, among other things, would give computer makers more freedom to feature rival software on the machines they sell and prevent Microsoft from retaliating against them.

Nine of the 18 states in the lawsuit agreed to sign on to the deal, but the other nine are still pursuing the case.

The dissenting states, which include California, Massachusetts and Iowa, say their additional remedies would close a series of settlement loopholes. It also would force Microsoft to sell a cheaper, stripped-down version of its Windows operating system and disclose the system's inner workings.

Kollar-Kotelly will hold a hearing starting March 6 on whether the proposed settlement is in the public interest. Separate hearings on the demands for tougher sanctions will begin March 11 and will likely run for 6 to 8 weeks.

Copyright 2000 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.