Compaq Computer Corp. rushed into the trenches on Wednesday, Feb. 17, to help business partner Microsoft in the government's antitrust trial. But as the courtroom battle raged, Compaq wound up taking some bullets.

Compaq Senior Vice-President and Group General Manager John T. Rose took the stand to contradict one of the main planks of the Justice Dept.'s case: that Microsoft in 1996 illegally forced Compaq to stop giving preferential treatment to Netscape Communication Corp.'s competing Internet browser. According to Justice, Microsoft threatened to terminate Compaq's license to distribute Windows -- a move that would have made Compaq's personal computers virtually unmarketable.

But Rose testified that Microsoft's conduct was all within its legal rights. On Aug. 8, 1995, executives from Microsoft and Compaq reached an oral agreement in which Compaq agreed to favor Microsoft's Internet browser, Rose told the court. That contract was later broken, Rose said, when other Compaq execs inadvertently promised to give preferential treatment to Netscape's Navigator -- and then proceeded to remove the icons for Microsoft's Internet Explorer from some Compaq computers. "Unfortunately, we had a communications breakdown," he admitted.

WHAT CONTRACT? When Microsoft complained about the removal of Internet Explorer icons, Rose said, it wasn't bullying Compaq. Rather, the software giant was forcing the Houston computer maker to honor its Aug. 8, 1995, contract.

But Justice lead litigator David Boies cast doubt on whether the oral contract even existed. He pointed out that some of the same people who made the original oral agreement with Microsoft participated in the second written contract to promote Netscape's browser -- conduct that doesn't make any sense if the first oral agreement really existed. Boies also released internal Compaq documents indicating that employees appeared not to have heard of the August 8, 1995, contract.

Cross-examination of Rose will continue on Thursday, Feb. 18. The next witness will be Microsoft's Daniel Rosen, a key participant in the controversial 1995 meeting in which Microsoft allegedly offered to divide the browser market with Netscape.

By Mike France in Washington