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DoJ deploys antitrust expert to prove Microsoft misuse of monopoly

Warren-Boulton looks like being a tough nut for Microsoft to crack

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Yesterday the DoJ reached its central allegation: that Microsoft is a monopolist (not illegal in itself, but denied by Microsoft), and that Microsoft monopolises markets by exploiting its operating systems dominance. Its witness was Dr Frederick Warren-Boulton, a consultant economist and scholar with an impressive twelve-page CV [and it's "vitae" not "vita",W-B (Pedant - Ed)] that includes a stint as a deputy assistant attorney general for antitrust during the Reagan days. His cross-examination started yesterday and is likely to continue for several days. W-B has played a role in most important antitrust actions since the AT&T case in 1981. His 88-page written testimony, which includes 142 references, has been meticulously prepared, unlike previous written testimony which is frequently emotive, rambling and repetitive. He is a very dangerous witness against Microsoft because he really understands monopolies, and how to win such cases in the courts. W-B's expert opinion is that according to the methodology used for defining markets in Sherman antitrust cases, Microsoft does have a monopoly in the relevant market - operating systems compatible with Intel x86/Pentium architecture - in excess of 90 per cent. Furthermore, the market share is protected by "substantial" barriers to entry, and reinforced by "network effects", which could be described as "everybody loves a winner". All of this is perfectly apparent to those at the coal face, but it does require rigorous legal proof, based on economics. W-B's second broad conclusion is that Microsoft has engaged in a number of practices that make it difficult for other browser developers. This is particularly important because Microsoft is more vulnerable to cross-platform technologies like browsers being used to launch applications, rather than a direct rival to Windows. Gates confirmed this when he wrote in an email: "[Netscape] are pursuing a multi-platform strategy where they move the key API into the client [browser] to commoditise the underlying operating system." This is of course the reason for Microsoft's relentless demands that OEMs, ISPs, online services and content providers should be locked into using IE. Such practices are exclusionary and impede commercial opportunities for rivals [which is illegal], W-B notes, and limit user choice. W-B excludes the only possible let-out clause in antitrust legislation by giving as his expert opinion that Microsoft's practices are not justifiable on efficiency grounds. Tying IE to Windows is unjustified, he says, but here W-B steps a little too far, taking on himself the role of operating system designer. Although few are in doubt that Microsoft deliberately made it as hard as possible to separate IE and Windows, and that it was done to defeat Netscape, Microsoft does have the right to do this, just as the court has the right to undo the effectiveness of the tying by some means not yet defined, if it finds that the tying was done with the objective of monopolising the market. It is likely that Judge Jackson will read W-B's testimony very carefully, since it is written in language that is directly relevant to the case that the DoJ has brought. ® Complete Register trial coverage

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