MS modifies line on market splitting meeting with Netscape

'Fess up, Barksdale, you connived with the DoJ, alleges Microsoft attorney

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Microsoft has changed its story about the 21 June 1995 meeting between it and Netscape at which it is alleged that illegal market splitting was proposed by Microsoft. Until yesterday, Microsoft's story had been that Netscape had fabricated the evidence, but now the story is that there is a conspiracy against Microsoft, principally involving the Department of Justice and Netscape, and that Microsoft had been set up for the 21 June meeting. "Isn't it a fact that the 21 June meeting was held for the purpose of creating something that could be called a record and given to the DoJ to spur them on?" Microsoft trial attorney John Warden asked Netscape CEO Jim Barksdale. "That's absurd," Barksdale replied. Warden then produced Marc Andreessen's deposition in which Andreessen had said that he took careful notes of the 21 June meeting because he "thought it might be a topic of discussion with the US government on antitrust issues". Warden suggested that the Netscape may have been in touch with the DoJ before the 21 June meeting, but Barksdale was adamant that the purpose of the meeting was to persuade Microsoft to release to Netscape some dial-up software and APIs to make Navigator function better with Windows. It is worth considering the circumstances that resulted in the meeting being held. In the first place, had the meeting really been a set-up, better arrangements would have been made to record the proceedings -- such as a hidden tape recorder. It is a more convincing story that Netscape did require some technical information from Microsoft to link Navigator to Windows, and needed to appear to be friendly to get this. Normally, Microsoft gives this information to developers who support the Windows operating system. However, Microsoft is somewhat reluctant to do this if it has, plans to have, or even vaguely thinks it might have its own competitive product. Netscape, of course, was well aware of this: upsetting Microsoft in any way could result in Microsoft withholding essential technical information from Netscape. Microsoft was clearly sensitive at the time about its first version of Internet Explorer, since it must have been clear to Microsoft that it was an inferior product to Navigator (as it has even subsequently admitted). At the same time, neutralising Netscape through a small investment and market-splitting arrangement could solve the problem, but Netscape did not want to play this game. Consequently, Andreessen (who Barksdale has described as one of the fastest typists he has ever seen) was sitting at the meeting making sure that he had a good record of what transpired. This may well have been at the suggestion of Gary Reback, Netscape's outside lawyer. Barksdale's earlier response to Warden that he had not mentioned the market-splitting offer in any correspondence is therefore understandable, given this context. It is also quite possible that there was considerable internal disent at Netscape about it and other matters -- Barksdale has already alluded to some dissent. Whether it was by chance that the DoJ issued a demand for documents from Netscape the day after the meeting with Microsoft is hard to say with certainty, but coincidences do occur. During Warden's questioning of Barksdale, he moved along considerably faster than in previous days, and is evidently mindful that the Judge presiding over the hearing is also making the decision at the end of the case -- even if it will be appealed. A sideshow was the introduction of some rather childish emails from two Netscape fora, known as "Bad attitude" and "Really bad attitude". It was sad that Microsoft should feel that it could extract some advantage from the messages, which were a way of letting off steam, and cannot necessarily be taken at face value. One message described Navigator as being "faster than a dog with no legs", while another message referred to Netscape offering "vaporware announcements and outright lies". Had it been thought worthwhile to conduct a similar exercise with Microsoft's internal email, it would have been very surprising if equivalent statements about its won products had not been discovered. There were apparently more messages about the quality of the cafeteria food than the quality of Netscape's products or management. Barksdale characterised the messages as being by "an internal group of people who, I guess, complain about their company" and that not all employees had taken the view that "the sun will come up tomorrow". Warden tried to get Barksdale to conceed that AOL chose IE because it was a better product, but Barksdale said that "AOL told me that [including the AOL icon in Windows 95] was worth a lot of money to them". A few blocks away in Washington, at the National Press Club, Steve Case, CEO of AOL, admitted that AOL decided to switch from Navigator to IE because AOL wanted to be bundled with Windows. Although this was said to the court of public opinion, it will be repeated in the federal court shortly. Barksdale introduced what appears to be a new accusation -- that Microsoft had put "technical incompatibilities" in Windows NT to cause difficulties with Navigator's performance. Such techno-sabotage has been alleged several times in the past by Microsoft, most notably the claims that such technqiues were used so that DR-DOS gives an unnecessary error message if run with Windows 3.1, in order to discourage users from substituting DR-DOS for MS-DOS. Another tactic tried by Warden was to confront Barksdale with a January 1995 Netscape document in which the possibility of Microsoft developing a browser and bundling it with Windows 95 was identified as a risk to Netscape's business. Barksdale has indicated that he has no concerns about Netscape products competing on merit. The Reback letter of 23 June also destroys an earlier argument that Warden had been making based on a second Reback letter of 28 July 1998: Warden implied that because the later letter did not mention the market-splitting allegation, it had been invented. ® Complete Register trial coverage Click for more stories

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