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Microsoft Aggressive With Final Government Witness
By Ted Bridis  Associated Press
WASHINGTON — Microsoft's questioning of the government's final witness in its antitrust case turned combative Thursday over the software giant's promise to make its Internet software "forever free."

Microsoft's lawyer even offered to pause so the witness — economist Franklin Fisher of the Massachusetts Institute of Technology — could control his blood pressure.

The most contentious moments came amid questions about the price Microsoft charges for its Windows operating system and its Internet browser software.

The government contends the company bundled its browser free into newer versions of Windows — and pledged to keep its Internet software "forever free" — solely to undercut rival Netscape.

Netscape's own popular browser competed directly with Microsoft's and once earned that company tens of millions of dollars.

"If Henry Ford had a monopoly, we'd all be driving black cars," Fisher said, his voice rising. "That's not what competition is about. That's not what helping consumers is about."

"Now you seem agitated, sir," Microsoft lawyer Michael Lacovara responded.

"I am agitated. I feel very strongly about this," Fisher said. "We're going to live in a Microsoft world. It might be a nice world, but it's not a competitive world."

Lacovara offered to take a short break, but Fisher said his blood pressure wasn't cause for concern.

At another point, Fisher paused after Lacovara asked about his previous testimony that Microsoft "studied and tried to implement ways to disable Netscape and reduce total browser sales."

Lacovara began to speak again when Fisher replied: "I'm just dumbfounded by the question. It's not that I can't answer it."

Fisher then recounted government allegations that Microsoft bundled its own browser into Windows, promised the browser would remain free and used its influence to discourage others from distributing Netscape's browser.

Under federal antitrust law, a legal claim of predatory pricing includes the expectation that Microsoft eventually would raise its prices once it dominated the market.

In earlier testimony, Fisher told the judge that Microsoft spent "hundreds of millions of dollars" to develop its browser and set its pricing "for the explicit purpose of depriving rivals of revenues needed to be viable."

Microsoft maintains that it never planned to earn money selling its browser, but did plan to profit from advertising fees. The company's chairman, Bill Gates, previously said in an interview that advertising fees from a browser, from the search page and the home page, far exceed the cost of development. "So, clearly, the browser should be free."

Lacovara, for example, said companies with tools to search for specific information on the Internet — such as Lycos and AltaVista — pay Microsoft $15 million annually for prominent placement on its Web site.

But Fisher said: "That (explanation) appears to have been invented in the middle of this trial."

Outside the courtroom, a Microsoft spokesman cited a single line in a May 1995 e-mail from Gates discussing what he called "a very powerful deal of some kind we can do with Netscape."

Gates suggested in the e-mail that Netscape be told that browsers "make no money." Netscape earned roughly $8.2 million selling its browser during the second fiscal quarter that year.

Fisher acknowledged to Lacovara that many software companies distribute products free in order to sell related products or services, or to gain a foothold in a market. But Microsoft went further, he said.

Microsoft will begin calling its witnesses — starting with MIT economist Richard Schmalansee — next week.

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