Microsoft appeared to stumble in its attempt to kick off its defence against the US Government's antitrust charges when its first witness conceded some points.
Microsoft's first witness, Richard Schmalensee, dean of the Sloan School of Management at the Massachusetts Institute of Technology, was supposed to counter the main economic arguments that the US Department of Justice and 19 states are making in their broad antitrust case against the software giant.
The heart of the Government's argument is that Microsoft has illegally used its Windows monopoly in the desktop operating systems market to damage competition. The basis of Schmalensee's argument is that the PC desktop operating system is not a "relevant market" as far as the Government's charges are concerned because Microsoft is threatened by cross-platform technologies, such as Java and Internet browsing technologies.
Lead Government trial attorney David Boies, however, essentially got Schmalensee to acknowledge that if PC manufacturers are unhappy with Windows-related contractual restrictions, there are no viable alternative desktop operating system suppliers for them to turn to -- at least, in the short term.
Boies also, by way of analogy, scored some points on the issue of application integration. This is a key issue, since the Government alleges that consumer choice suffered as a result of the bundling of Microsoft's Internet Explorer (IE) browser and Windows.
Boies asked Schmalensee whether consumers would benefit if Microsoft's word processing software MS Word was integrated in the operating system in much the same way as Internet Explorer. Schmalensee said there could be benefits, but he also acknowledged under questioning that if rival word processing programs, such as Corel WordPerfect, didn't work as well as a result of Word's integration, then there could be consumer harm.
Boies also pressed a faltering Schmalensee about whether an internal Microsoft document that described Microsoft's most recent version of the company's Internet Explorer browser as "not compelling" belies the company's claim that its browser gained market share because of technological improvements.