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From...
Microsoft lawyer: Antitrust case built on false premises
June 16, 1998
Web posted at: 4:07 PM ET
by Torsten Busse
(IDG)
-- Microsoft will ultimately prevail in the antitrust lawsuit filed by
the U.S. government against it because the case is based on false premises,
and previous case law works overwhelmingly to Microsoft's advantage, a
lawyer for the software company said Monday.
"The rule that emerged from previous cases shows that a company is free to integrate products if the result is a better product," Bradford Smith, general counsel for Microsoft's international legal department, said at a press briefing at the company's headquarters in Redmond, Washington.
Previous cases ruled on the basis of the Sherman Antitrust Act show that if the integration of a new product into an existing one results in a better product that benefits consumers, the courts will not stand in the way, even if the company may have a monopoly status in its industry, he said. The Sherman Antitrust Act is the U.S. law at the center of suits filed last month against the company by the U.S. Department of Justice and 20 U.S. states. The lawsuits were later combined.
Smith's comments might shed light on how Microsoft intends to defend itself in the case set to go to trial in September.
The lawsuit against Microsoft accuses the company of unfairly using its monopoly in the computer operating systems market to gain a larger share of other software markets, including the market for Internet browsers.
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Before the case is over, Smith said, two things will be "crystal clear."
"The people at Microsoft believe that the integration of Internet Explorer with Windows 98 results in a better product for consumers," Smith said. "The second thing that will become clear is that this view is shared throughout the industry."
The Microsoft lawyer cited several antitrust cases, including cases filed against Kodak in the 1950s and IBM in the 1980s, in which the courts ruled that combining products resulted in better products to the benefit of consumers or the market overall.
"And if integrated new products result in improved, more-efficient products, then that is permitted under the law," he said.
"There are lots of things we could do under the law, even if we were a monopoly," Smith said in reference to the Sherman Act, which spells out the U.S. antitrust laws in less than ten sentences. The law leaves the courts with lots of room for interpretation, said Smith, adding that he does not see a need to rewrite the antitrust laws to account for the fast pace of innovation and change in the high-tech sector.
Asked if Microsoft has considered including competing browsers with its operating system, which would eliminate the basis of the antitrust lawsuit, Smith said too many options at start up would make the operating system's launch process too complicated for consumers. In addition, such inclusion of third party products with Windows 98 would result in many other companies asking for its products to be included as well, he said.
Smith also said the Justice Department's case is based on the false assumption that Microsoft decided to integrate its Web browser with Windows to attack Netscape Communications and its Navigator browser. Instead, Microsoft has integrated the browser because "it was a logical step to giving consumers better access to the Internet." Smith also had a few words of wisdom for Intel, which this month was hit with an antitrust complaint by the U.S. Federal Trade Commission alleging that the chip giant withheld vital technology information from three vendors and is using its monopoly power to cement its dominance over the microprocessor market.
When asked for his advice to Intel, Smith said with a hearty laugh: "Take one day at a time."