MS/DOJ: Microsoft wraps up its case in remedy hearing

The last witness for Microsoft finished testifying today, a computer scientist who claimed it was technically infeasible for the software giant to produce a stripped-down version of Windows.

The company was set to rest its case next week once it introduces some final documents. The two sides also plan to hold a conference call with the judge on Monday to set a schedule for the final legal arguments.

Tom Greene, California senior assistant attorney general, who spoke to reporters after the courtroom closed for the day, said the states "were extraordinary pleased on how our case came out. ... We think we've given her [the judge] a very rich record to work from."

But after 32 days of evidentiary hearings, it will soon be up to U.S. District Judge Colleen Kollar-Kotelly to determine just what remedies the company should face for its antitrust violations.

Kollar-Kotelly faces tough choices. None other than Microsoft Chairman Bill Gates has warned the judge that if Microsoft is forced to produce a stripped version of Windows, it will mean the end of the operating system.

But the heart of the nonsettling states' case is the provision that allows PC makers to substitute rival software such as the browser or media player for Microsoft applications. The nine nonsettling states see that as critical to restoring competition.

The judge has favored Microsoft in many of her procedural rulings, according to legal experts and people close to the case. Unclear is whether the judge is signaling sympathy for the software giant, or just acting carefully and closing off Microsoft's potential avenues of appeal.

Microsoft witness John K. Bennett, a computer science professor at the University of Colorado at Boulder, represented the last opportunity for the states to show that Microsoft can produce an unbundled version of Windows. He was Microsoft's 18th witness; the states called 15.

Under cross-examination from states' attorney Steven Kuney, Bennett was unyielding in his argument that the remedies sought by the nonsettling states are unreasonable, infeasible and excessively broad. Kuney, however, attempted to show that it was Bennett's arguments that were unreasonable and not backed up by his own facts.

For example, Bennett said producing a Windows version with stripped out components would add four to six months of testing for each variant of the opportunity system. The number of versions to test "grows exponentially" with the number of removable components, he argued.

That was a conclusion based on a telephone interview Bennett conducted with Microsoft employees and his experience with servers.

But Kuney wanted to know what he did to verify that conclusion -- how did know? Bennett acknowledged that he had made no attempt to determine the specifics of what would happen.

The states want to force Microsoft to make it possible to remove Web browser code from the operating system. Bennett acknowledged that it is "not a technically impossible job to remove the code" but that the functionality would nonetheless have to be replaced.

The job ahead for Kollar-Kotelly is to decide whether to accept or reject the settlement reached with Microsoft by the Bush administration and nine of the 18 states. That settlement is the baseline, and the states seeking more restrictive remedies faced the tougher task in this proceeding.

"The states do bear the burden of proof. And that's the big difference," said Andy Gavil, an antitrust professor at Howard University School of Law. "They have to establish that additional remedies are needed."

There are broad differences between the Bush administration settlement and remedies sought by the nine nonsettling states. For instance, the settlement allows PC makers to remove end user access to Microsoft applications; the state proposal requires the code removal. Both remedies call for broader interface disclosure provisions, but the nonsettling states want to give developers access to Windows source code. The federal settlement does not call for that to occur.

The states had planned to fortify their argument that applications can be pulled from the Windows operating system with testimony next week from two rebuttal witnesses, including James Bach, a computer consultant who worked with XP embedded, a tool used to build operating systems for devices such as cash registers that also allowed Microsoft to create an unbound version of Windows.

But Microsoft said it would take them considerable time to review Bach's research. Kollar-Kotelly, who had previously endorsed rebuttal witnesses, was angered by the state's last-minute introduction of evidence, and the states, saying they didn't want to prolong the case, withdrew their rebuttal plans.

Despite a lack of clear signals from the judge, legal experts doubt she will go as far as ordering the porting of Office and other sweeping remedies. Kollar-Kotelly has narrowed the scope of the remedy phase, and that could mean a limited final order.

"This judge didn't allow hearsay and other inappropriate statements into the record," said Hillard Sterling, an antitrust expert at Gordon & Glickson LLC in Chicago. "That alone should help Microsoft secure an order it can stomach."

But the judge may be more comfortable with state attempts to toughen the proposed settlement, such as the appointment of a special master overseeing the case.

The settlement "screams for that" oversight, said Dana Hayter, an attorney at Howard Rice in San Francisco and a former U.S. antitrust attorney. Under the proposed settlement, a technical committee would keep watch on Microsoft's compliance with the remedy.

"But the technical committee doesn't report to the judge; the judge has no way to know whether Microsoft is complying with the settlement agreement."

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