This week's court testimony by Bill Gates is certain to shape the outcome of the current penalty phase of the case against software giant Microsoft. The question before a federal judge is how Microsoft, already having been found guilty of anticompetitive practices, should be prevented from further such offenses.
Nine states are seeking tougher penalties than those agreed to last summer in a deal that included Microsoft, the federal government, and a number of other states. The nine want such steps as creation of a modular version of Windows that would allow insertion of other companies' products, like Web browsers. They also want Microsoft to share more of the programming code for its products.
Mr. Gates said these steps would destroy his company's ability to compete and set back innovation in the whole computer industry. Yet testimony on Wednesday brought out that Microsoft already markets a version of Windows XP that could lend itself to modular applications.
The judge has a delicate task. Gates may have a point about not undermining the uniformity Windows has brought to computing. But there's no question its dominance was used to squelch competition. A stronger remedy is needed than last summer's relatively toothless agreement.