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NOV. 5, 1998 8pm ET
The Outbursts That Punctuated a Tedious Day
Sometimes you have to wait -- and watch -- for the telling details to reveal themselves

Two days of cross-examination of Apple Computer Inc. Senior Vice-President Avadis "Avie" Tevanian Jr. ended the third week of the Microsoft antitrust trial. The tediousness of this cross-examination on Thursday, Nov. 5, was sometimes broken by short bursts of excitement ranging from fireworks from the judge to allegations of threats and strong-arming.

Here are some highlights:

"Knife the Baby": A key allegation in Justice's antitrust case against Microsoft is that the software giant used illegal tactics to force Apple Computer Inc. to abandon its QuickTime software that plays sound and video files on the Internet. The government contends that Microsoft saw QuickTime as a potential threat to its Windows operating-system dominance. Both Windows and Apple Macintosh computers use QuickTime.

During two days on the stand, Tevanian accused Microsoft of seeking to divide the multimedia market and then "sabotaging" QuickTime's ability to work with Windows computers when Apple declined to go along with Microsoft's plan. Justice also is accusing Microsoft of attempting to illegally allocate the Internet browser market.

In particularly colorful testimony on Nov. 5, Tevanian described an April, 1997, meeting between two Apple and two Microsoft officials. Tevanian, who was not at the meeting, said Microsoft officials suggested that Apple abandon its business of providing "playback" software that enables users to view multimedia content on the computers. Instead, they offered Apple the much smaller portion of the market for the tools that developers use to create the content. In Apple's mind, though, the playback software was its baby.

According to Tevanian, Apple executive Peter Hoddie asked Microsoft officials, "'Are you asking us to kill playback? Are you asking us to knife the baby?'" He said Microsoft official Christopher Phillips responded, "'Yes, we want you to knife the baby.' It was very clear."

In September, 1997, Tevanian said he met with a Microsoft official, who warned that if Apple refused to cede the playback portion to Microsoft that Microsoft CEO Bill Gates would devote all the resources he needed to take over the entire multimedia market. Relations got so hot that Apple chief Steve Jobs in February wrote Gates an E-mail, noting that Gates's Microsoft employees "are really going out of their way to say that they intended to kill QuickTime, and are being quite rude about it. Apple will need to recirocate (sic) in kind if this behavior keeps up." Jobs ended the letter by saying that he hoped that Gates did not respond to "honest and proper" competition from Apple "with down and dirty tactics."

Now Apple is accusing Microsoft of "sabotaging" QuickTime's ability to work in the latest version of Microsoft's Internet Explorer. Also, Microsoft has bundled in its own version of multimedia software in Windows 98.

Judge on the Attack: U.S. District Judge Thomas Penfield Jackson only rarely speaks, asking for occasional clarification or noting that it's time for a recess. And he has developed a rapport with Microsoft's chief trial attorney, John L. Warden. But Jackson showed little patience for Theodore Edelman, the Microsoft attorney who was cross-examining Tevanian.

At one point, Edelman, an attorney with New York's Sullivan & Cromwell, was questioning Tevanian about an internal Apple document outlining several possible areas of collaboration with Microsoft in multimedia. Edelman was trying to show that Microsoft's intentions were not nefarious and that Apple was actually interested in some form of collaboration. Though Edelman kept referring to the E-mails as a proposal, Tevanian repeatedly denied that this was anything of the kind, pointing out that they were some ideas by engineers and that senior officials rejected them promptly. When Edelman again referred to the proposal, Jackson blew his cool, "You keep mischaracterizing what he told you. He said this was not a proposal. This was a predecisional communication by two Apple engineers, which was explicitly rejected by Mr. Tevanian and others as a proposal. It's misleading language and is not acceptable to me."

With that, Edelman moved on. But later in the day, Jackson dressed down Edelman again when the attorney asked Tevanian to testify about a 10-page document that he had never seen. The judge called a 10-minute recess so Tevanian could review it, and when the court reconvened, Tevanian said the document was too complicated to understand in 10 minutes. When Edelman persisted, Jackson stopped him, noting that Tevanian said he could not comment. When Edelman suggested that Tevanian read the document over the weekend, Jackson turned to Tevanian, "He may have other things to do over the weekend." Tevanian responded, "That's true." Jackson told Edelman: "I think you better go into another area."

What's So Bad About Integration? One of Microsoft's key defenses is that by fully imbedding its browser into the new version of Windows, computing is considerably easier for users. Justice argues that Microsoft integrated its browser with the intention of killing off its chief browser rival, Netscape Communications Corp. It's one of the most troubling aspects of the case for Jackson, because an appeals court in June already ruled that Microsoft should have a lot of leeway to design its products.

Tevanian testified that Apple had studied the idea of integrating a browser into its operating system but abandoned the notion. Instead they offered up a product called "cyberdog" in September, 1996, which bundled, rather than integrated, a browser into its operating system. That interested Judge Jackson, who asked Tevanian what the benefits were for integrating vs. bundling.

Tevanian said Apple rejected an integrated browser because it caused "confusion" for users and that there were "often simpler ways of accomplishing things." But isn't there a benefit to the consumer from integration, the judge asked. Tevanian said Apple decided that "we can provide a great Internet experience to users by bundling the browser." Then the judge asked whether Apple could "extricate" its browser from the operating system without breaking the system. Tevanian said yes. Microsoft claims that it cannot remove its browser without disabling the entire system.

Next up: The government gets to question Tevanian on Monday morning. A witness from Intel Corp. is expected to take the stand after him.

By Susan Garland in Washington


Previous BW coverage of the trial

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