The US government's initial claim that Microsoft?s inclusion of Internet Explorer into its Windows 98 operating system was illegal and would harm consumers became the focal point of the trial Tuesday.
Lead government attorney, David Boies, questioned Microsoft witness professor Richard Schmalensee, who claimed that IE is integral to the Windows operating system, being integrated seamlesssly and not a separate application.
Schmalensee, an economist at the Massachusetts Institute of Technology, admitted that Microsoft knew its decision would make life difficult for rival Netscape.
The timing of that decision is critical to determine the legality of the integration of IE with Windows 98 as Microsoft claims it was made before Netscape was a significant company.
However, Microsoft has only revealed the date when the decision was revealed - 7 December, 1995, by Bill Gates during his Internet Strategy Day speech - so Schmalensee claims the decision was likely to have been made much earlier.
The amount of harm this would cause consumers through denying them a choice of browsers was under scrutiny. Schmalensee admitted that Microsoft's distribution of IE did make it more difficult for Netscape to compete as a platform competitor, but not impossible, he claimed.
He also refused to accept the prosecutor's assertion that it was the combination of IE with the Windows operating system that actually stopped Netscape competing on a platform level.
"The combining was a way Internet Explorer technologies were distributed, and whether the combination itself as opposed to other things that might have happened had an appreciable effect, I don't know. But the competition from IE had some effect," he said.
Boies asked Schmalensee to consider if Microsoft?s word processing software, Word, was integrated into the operating system in the same way, whether consumers would benefit.
Schmalensee said there would be benefits, but acknowledged that if, as a result, rival word processing software was found not to work as well, then that would indeed harm consumers.
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