MS/DOJ - Gates in court: Would he really pull Windows?

Microsoft Chairman Bill Gates was poised and engaging as he delivered a stunning message from the witness stand last week in the still ongoing remedy hearing: Adopt the wrong remedies, and he'll have to withdraw Windows from the marketplace.

Moreover, said Gates, the remedies sought by the nine nonsettling states would cause loss of revenue and employees and send his company's multibillion-dollar research and development engine "into a 10-year period of hibernation."

Gates delivered that message during three days of testimony. In the process, he demonstrated that he's thoroughly knowledgeable about the technical and legal issues facing his company.

The job of U.S. District Judge Colleen Kollar-Kotelly, who is also acting as jury, is to decide whether Gates was bluffing. Some users are convinced he was.

"It's hyperbole," Larry Young, information systems manager at International Environment Corp., an air-conditioner parts maker in Oklahoma City, said of Gates' threat to pull Windows from the market if forced to produce a stripped-down version.

Still, Gates "did an admirable job presenting his case, as bad as it was," said Young.

The threat to pull Windows "was a little bit on the outrageous side," said Kevin Shauvin, IS director at Huntwood Industries Inc., a Spokane, Wash.-based cabinet maker. But he credited Microsoft with bringing some standardization to IT. The court has to ensure that this standardization "is not disturbed," Shauvin said.

Frank Orlow, technical services manager at Clark Retail Enterprises Inc., an Oak Brook, Ill.-based operator of more than 1,330 convenience stores, doesn't believe that Microsoft would pull Windows from the market. But Gates' testimony helped the company's credibility, he said.

"I felt uncomfortable when he stepped away from the CEO position ... and let other people be up front speaking for Microsoft -- like he was trying to hide something," Orlow said.

Gates wasn't hiding from the questions posed by the states' attorney, Steven Kuney, who was clearly out to rattle his witness. Questioning Gates about his assertion that the remedies would lead to cloning of Windows, Kuney asked icily, "Does that somehow not happen when Microsoft is cloning other people's software?" When faced with hostile questions, Gates calmly stuck to his arguments.

Before he took the stand, Gates presented a 163-page testimony that included a detailed analysis of proposed state remedies that would force Microsoft to produce a stripped-down version of Windows, allow other companies to port Office to Linux and other operating systems, make Internet Explorer open source and offer developer access to Windows source code.

In that testimony, Gates made "legitimate points" in support of his contention that the remedy sought by the District of Columbia and the nine states that have refused to sign the Bush administration settlement wasn't thought through as well as it should have been, said Rich Gray, an antitrust attorney in Menlo Park, Calif.

But Gates' assertion that the remedies would force Windows off the market is "a noncredible" claim that jeopardizes his entire testimony, said Steven Newborn, an antitrust expert at the Washington office of law firm Clifford Chance Rogers & Wells LLP. "Judges are savvy," he said. "They hear these threats all the time."

The potential is there that the judge will view Gates' testimony as a bluff, agreed Dana Hayter, a former U.S. Department of Justice antitrust attorney at Howard, Rice, Nemerovski, Canady, Falk & Rabkin in San Francisco. But Gates' witness-stand performance may help him.

"Demeanor is important when evaluating testimony," said Hayter. "It may be true that from Gates' perspective, it would be the end of the world as he knows it, but that's his subjective perspective."

One thing is certain, said Tim Guyer, an IT director at Werner Co. in Greenville, Pa. "Windows is so ingrained in the world right now" that Gates wouldn't be able to withdraw it from the market even if he wanted to, he said.

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