Judge throws out testimony alleging Microsoft wrongdoing

By D. Ian Hopper

Associated Press

WASHINGTON – The federal judge hearing the Microsoft antitrust case said particularly damaging testimony against the company is hearsay, and refused to consider it in deciding whether nine states can impose harsh penalties on the company.

U.S. District Judge Colleen Kollar-Kotelly said the written testimony from RealNetworks vice president David Richards could not be admitted because Richards did not have direct knowledge.

Among many other allegations, Richards said Microsoft had insisted that America Online drop RealNetworks’ media software in favor of Microsoft’s. To make the claim, Richards cited an e-mail last year between AOL CEO Barry Schuler and RealNetworks head Rob Glaser.

“They want to kill you guys so badly, it is ugly,” Schuler told Glaser.

Despite protests from lawyers representing the states that the e-mails provide context of Microsoft’s behavior, the judge threw them out. She said the states have not called those individuals, like Schuler, to confirm what Microsoft said.

“I don’t see how this can be anything but hearsay,” Kollar-Kotelly said.

The states are asking Kollar-Kotelly to force Microsoft to create a stripped-down version of its flagship Windows software that could incorporate competitors’ features. The states also want Microsoft to divulge the blueprints for its Internet Explorer browser.

The federal government and nine other states settled their antitrust case against Microsoft last year.

The original judge in the case, Thomas Penfield Jackson, ordered Microsoft broken into two companies after concluding it illegally stifled its competitors. An appeals court reversed the penalty but not the conviction and appointed Kollar-Kotelly to determine a new punishment.

Microsoft has expressed some frustration that, while Kollar-Kotelly seems sympathetic to the idea that the states should not be able to present new allegations of wrongdoing, she still has made no definitive ruling on the question.

“We’re beginning to sound like a broken record on this point,” Microsoft lawyer Richard Pepperman said.

Kollar-Kotelly said she is hesitant to rule prematurely because she wants to give the states a chance to show that the new allegations – such as one that Microsoft strong-armed computer maker Dell into dropping support for the rival Linux operating system – are similar to adjudicated violations and relevant to the penalty hearing.

The states cite the allegations as reasons why the deal Microsoft made with the federal government won’t work. Microsoft says some of the allegations would be fixed by the settlement.

“Many of the things they point to, under the consent decree, would not have occurred,” Pepperman said.

Kollar-Kotelly, who also has not ruled in a separate proceeding on whether to approve the federal deal, refused to give the ruling Microsoft wants. She reminded the company that the deal does not have the force of law yet.

“Let me just say that it’s the proposed consent decree,” she said.

States that rejected the government’s settlement with Microsoft and have continued to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.