Microsoft had more than a bad day in court

So how badly have things been going for Microsoft?

Like a prizefighter who staggers back to his corner for a rest after a brutal round, Microsoft lawyers and officials must be grateful for the month-long recess in its antitrust lawsuit in Washington.

On the last day of the trial, brought against the company by the Department of Justice and 19 states, Judge Thomas Penfield Jackson lost his temper with Microsoft's final witness.

Judge Jackson, apparently tired of Microsoft's arguing over semantics, interrupted senior vice president Robert Muglia and said that his interpretation of a memo from Bill Gates - in which Gates said he was "hard-core" about not supporting Sun Microsystems Java Developers Kit (JDK) - was wrong. When Mr. Muglia (who had said that Mr. Gates was not opposed to supporting JDK) tried to continue, the judge ordered him to stop and called a recess.

Meanwhile, David Boies, the government's lead attorney, has been particularly successful at catching Microsoft lawyers off-guard.

For instance, Mr. Boies noticed that a video tape provided by Microsoft - which showed the effects of software that removed the Internet Explorer browser from the Windows operating system, a move that Microsoft said negatively affected the system - came not from one computer as the company said, but from two different computers. When Boies revealed this in court, Microsoft officials were left scrambling to explain what looked like an attempt to mislead the court. (Microsoft said the mix-up happened by mistake.)

Microsoft's view of the antitrust trial has remained consistent. Company lawyers and officials insist they are winning the case, and that the government has failed to prove any of the charges. General counsel William Neukom has repeatedly told the media that Microsoft has built a "solid record of evidence" that shows the company has done nothing to harm consumers.

In the week and a half since the trial ended, Microsoft has endured more bad news.

Last week, MSNBC reported that the government had asked a top Gateway computer executive to testify at the trial to tell how Microsoft had tried to pressure it into offering only the Internet Explorer browser on its products. Meanwhile, a German computer magazine reported a privacy breach - Microsoft passes user data collected during Windows registration onto its Web site Microsoft.com without the user knowing it.

And a week before, a Massachusetts Institute of Technology professor discovered that Microsoft Office software inserts IDs into each document a user creates without the user knowing it. The company collects the number when Windows 98 users register the software.

Even worse, a major software-industry lobby group last week recommended a restructuring of Microsoft, if it loses its case. A panel of antitrust experts, which included the head of the Federal Trade Commission, came to a consensus that Microsoft was "toast" in terms of the outcome of the trial.

So what remedies could be applied to Microsoft if it does lose its case?

There is always the complete restructuring/breakup recommended by the major software lobby group. But most experts think that the federal and state governments will try to break Microsoft's hold over personal computer manufacturers. This would come in the form of pricing transparency which would force Microsoft to set fixed prices for licensing Windows to PCs.

Microsoft has always used the secrecy regarding these matters to bend computermakers to its will. Such a move would allow both computermakers, and online services, more freedom to offer different kinds of software.

That may be why rumors appeared in the Seattle Times that Microsoft would be willing to negotiate an agreement before a decision was reached in the trial. A government source denied the government is talking with Microsoft, saying it is fairly obvious it is winning the case.

Regardless of the outcome, Microsoft will appeal, if it loses, and will fight any sanctions placed on it.

*Tom Regan is the associate editor of The Christian Science Monitor's Electronic Edition. You can e-mail him at tom@csmonitor.com

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