Original URL: http://www.theregister.co.uk/1999/01/11/ms_lashesout_at_economists_testimony/

MS lashes-out at economist's testimony

Judging by the response, Fisher may have touched a few nerves...

By Graham Lea

Posted in Business, 11th January 1999 13:15 GMT

Microsoft's fear of the testimony of economist Franklin Fisher is seen in its extraordinary response to his testimony it has posted on its web site. It is far longer than any other Microsoft response to testimony, and it seems that Fisher's summary of Microsoft's anticompetitive actions has indeed touched a painful nerve. Microsoft's document was released a day before Fisher's testimony became available, so keen was Fort Redmond to have its PR say. Fisher is criticised for directly contradicting the view he expressed in a book in 1983 after the dismissal of the IBM antitrust case, in which Fisher was chief economic witness for IBM. Microsoft quotes Fisher as saying: "Monopoly profits are earned through high prices and inferior products." Some might say this is an extremely good description of Microsoft's situation. Microsoft claims a "dramatic ideological reversal" by Fisher such that readers of his testimony reading his 1983 book would get whiplash. Fisher is accused by Microsoft of arguing for fewer choices for consumers – but in fact he does not. What Fisher did say was that because of network effects, there are many Windows applications and that this creates a barrier to a new operating system that could not use this applications base. "It is not possible to remove Microsoft's Internet Explorer technologies from Windows 98 without breaking the operating system," Microsoft trumpets. But Felten did this, and it worked. Nor does Microsoft admit that it specifically allowed its chum Dell to sell Windows 98 PCs without IE. Microsoft still makes the argument that Windows 95 with IE is a "single, integrated product," and quotes Netscape saying that it was Netscape's understanding that no portion of IE could be deleted from Windows 98; but this is what Microsoft told Netscape. Microsoft also claims that Fisher's testimony does not establish that the integration of "free browser technology into Windows amounts to a ‘predatory anti-competitive act'. " The response suggests that Netscape can distribute Navigator through PC manufacturers, but Microsoft has essentially precluded this by making it compulsory for Windows 98 licensors to take IE as well, whether or not it is required. Curiously, Microsoft quotes an article in which it is said that Netscape's browser is used by 40 per cent of Windows 98 users and nearly half of Windows 95 users. Microsoft is therefore saying that many users do not want IE. It is also untrue for Microsoft to claim that all ISPs can enter into business relationships with Netscape, while it will no doubt amuse Intel to read that the disagreement with Microsoft about NSP was the result of "nothing more than two companies disagreeing about how best to deliver new technologies to consumers". ® Complete Register trial coverage