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MS/DOJ: Judge Hears Pricing Testimony

MS/DOJ: Judge Hears Pricing Testimony

Microsoft antitrust trial Judge Thomas Penfield Jackson closed the courtroom to hear testimony concerning Microsoft's pricing strategy.

The judge's action means that the public will get, at best, "very general summaries" of the pricing information, said David Boies, the lead government counsel, outside of court here today.

But some parts of the closed-door testimony will ultimately be released.

Instead of deciding document-by-document what could or could not be discussed in open court, the judge decided to release at some point an edited transcript of the closed-door session that excludes confidential material.

In blocking release of the pricing data, the judge was acceding to motions by Dell Computer, Compaq Computer and Microsoft to keep the pricing information under court seal.

An attorney representing Dell told Jackson that disclosure of the information "could cause significant competitive injury."

Neither the vendors nor Microsoft want their competitors to know how much they are paying to license Windows. The data show disparities in what individual vendors pay Microsoft for Windows software.

An attorney representing Compaq said the information it turned over to the government also included details of its negotiating strategy with Microsoft, something it did not want released.

The pricing information was expected during the testimony of the government's last witness, Massachusetts Institute of Technology economist Franklin Fisher.

The Windows pricing data include licensing and pricing agreements with specific vendors. The government is using the information to show evidence of Microsoft's monopoly power, and demonstrate that it could raise prices without constraint.

Boies, speaking outside of court, arched his eyebrows when asked about Microsoft's contentions concerning operating system pricing. "I think that is going to be demonstrated to be counterfactual," he said.

Mark Murray, Microsoft's spokesman, said, "the facts will show that Microsoft does not have the power to set prices or exclude competitors."

Murray said Microsoft has produced new generations of software with more and more features giving consumers greater value. He compared Microsoft's pricing with the 1-cent increase in stamp prices that went into effect yesterday. "Do any of us believe we are getting better postal service as a result of that increase?" Murray asked.

The government has proposed releasing a chart that provides greater detail of the pricing disparities between vendors. Microsoft opposed the motion, arguing that analysts would be able to extrapolate specific vendor information from the chart.


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