Gates Ends Testimony, Says Tactics Didn't Hurt Competitors

Gates battled with lawyer Steven Kuney about matters large and small, raising his voice and occasionally showing frustration.

He and his company are trying convince a judge that Microsoft does not deserve additional antitrust penalties beyond those called for in a settlement with the federal government and nine states.

Nine other states are asking for the tougher penalties.

Kuney, the lawyer for those states, asked Gates if several acts by Microsoft, such as different methods to keep consumers from removing the Internet Explorer Web browser, "contributed significantly" to market losses by rival browser Netscape Navigator.

Two courts ruled the actions did contribute significantly, and that Microsoft broke the law and operated as an illegal monopoly.

"I accept whatever the Court of Appeals found in their opinion," Gates said. "I don't think it was at all a significant factor."

Gates has portrayed the state penalties as Draconian, and warned he might be forced to pull Microsoft's flagship Windows software from the market if they are enacted.

The states have suggested the Microsoft founder was simply using a doomsday defense to thwart penalties that are necessary to protect consumers.

Shortly before leaving the witness stand, Gates said the states' "breadth of restrictions" would hurt the personal computer market and stop Microsoft innovations.

"Microsoft (research and development) would at best go into a 10-year period of hibernation," Gates said.

Gates continually sparred with Kuney, frequently turning single questions into 30-minute discussions.

The states want computer manufacturers to be able to remove Internet Explorer and other features of Windows and substitute competing software. That, the states say, would reduce Microsoft's advantage, give consumers more choice and let software developers make many different kinds of programs.

The Justice Department and nine other states settled the case last fall and their deal with Microsoft is awaiting court approval. The states remaining in the case, along with the District of Columbia, want U.S. District Judge Colleen Kollar-Kotelly to impose tougher penalties than those in the settlement.

States that rejected the government's settlement with Microsoft and are continuing to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia.

The states got Gates to concede Microsoft already offers a version of Windows which lets companies choose which components they want to put into Windows and automatically adds other, required portions.

Gates had previously testified the company has not tried to figure out how to remove elements of its Windows operating system, because the task would be impossible.

The product is Windows XP Embedded. Although it is sold for devices like television set-top boxes and automatic teller machines, it is possible to configure it as a full-featured desktop operating system.

Microsoft uses its licensing terms to bar consumers from running XP Embedded on personal computers.

In the XP Embedded configuration program, a user can choose to add or remove the Internet Explorer Web browser, Windows Media Player music and movie software or a long list of other features. In consumer versions of Windows XP, removing Internet Explorer or Media Player is not possible.

"Someone at Microsoft has identified the code labeled as Windows Media Player 8.0 even though you testified earlier that that software is not offered separately," Kuney said.

"I don't know what Windows Media Player 8.0 is," Gates said, referring to an earlier argument that the boundaries between different Windows components are fuzzy.

"Evidently someone at Microsoft does," Kuney replied.

Under questioning, Gates admitted that Microsoft's popular Office business software could be configured to work on XP Embedded, although more work would have to be done to support software made by other companies.

XP Embedded would not fulfill the modular Windows requirement on its own, however. Microsoft would still have to either reduce the dependencies in Windows or leave some essential functions in.

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