November 5, 1998 4:30 PM PST

Apple: Microsoft was on warpath

WASHINGTON--The judge hearing the landmark antitrust suit here against Microsoft today appeared to run out of patience with the software giant, rebuking its attorneys and appearing to connect with a witness testifying for the government.

The tension erupted on the same day that an Apple executive charged that Microsoft proposed "knifing" Apple's multimedia products in a meeting between the two companies.

The most dramatic example of the judge's Microsoft's day in court displeasure came this morning, when he accused Microsoft attorney Theodore Edelman of twisting the words of Apple Computer senior executive Avadis Tevanian, who was cross-examined for a second day today and will continue to be cross-examined on Monday.

"You keep mischaracterizing what he has told you," U.S. District Judge Thomas Penfield Jackson said after the lawyer repeatedly referred to an email written by Apple engineers as a "proposal" Apple planned to take to Microsoft. "It's misleading language and it's not acceptable to me."

Tevanian had maintained that the email was merely a suggestion that was never given serious consideration.

Edelman, a partner with Microsoft's outside law firm Sullivan & Cromwell, appeared to annoy the judge at other points today as well. During one, the lawyer pressed Tevanian, Apple's senior vice president for software engineering, to comment on a technical document concerning Netscape Communications' software, even after a Justice Department (DOJ) attorney objected.

Jackson sustained the objection. "I think you better get onto another subject," he told Edelman.

At another point, Jackson appeared to grow weary of the cross-examination. After lunch recess, Jackson listened with his eyes closed and his head back on his chair for more than 30 seconds. A little later in the day he asked Edelman how much longer he intended to keep Tevanian on the stand.

"I want you to try to finish today," Jackson said.

Contrasting Jackson's alienation of Microsoft's legal team was the clear connection he made to Tevanian on a number of occasions.

Throughout his testimony, Tevanian often has turned so he is facing Jackson and addressed him directly. See CNET Radio: Our Man in Washington "Your honor, that's not even close to true," he protested after being asked a question. Later, Jackson and Tevanian launched into a long discussion over the difference between bundling and integrating two products.

Tevanian said there was a big difference between technical integration--where two technologies are melded together and cannot be separated without harming their performance--and bundling--in which two products are designed to work together seamlessly.

"We found we have been able to achieve what customers want by bundling the browser" with the Macintosh operating system, Tevanian said.

In written testimony, Tevanian alleges that Microsoft used its dominance in operating systems and computer applications to compete against Apple and other rivals. Among other things, Tevanian claims, Microsoft tried to "sabotage" Apple's QuickTime, a software product for writing and receiving multimedia content on the Internet. The Justice Department and 20 states, which filed suit against Microsoft in May, claim that Microsoft's actions against Apple are part of a pattern of behavior that violates antitrust laws.

Today's session, which wraps up the third week of trial here, was marked by long, arcane discussions concerning integration and computer incompatibilities that occasionally turned dramatic. For example, Tevanian claimed Microsoft's Christopher Phillips had told Apple executive Peter Hoddie that the company should back away from QuickTime.

Tevanian told the court: "Mr. Hoddie said, 'Do you want us to knife the baby?,'" referring to QuickTime. "And Mr. Phillips said, 'Yes we're talking about knifing the baby.'"

Under questioning, Tevanian conceded that he was not present at the meeting. But Tevanian said he attended another meeting in which Microsoft executive Don Bradford made a similar proposal to divide the multimedia market.

Tevanian said the purpose of the meeting was to discuss potential conflicts between the multimedia strategies of Apple and Microsoft. "Bill [Gates] wonders if the way to solve this is for us to take playback and you to take authoring," Tevanian said Bradford suggested, referring to the separate technologies used for viewing and creating multimedia files. "I said no, 'this is not acceptable,'" Tevanian said.

Microsoft was able to score points today, however, casting doubt on a number of key points in Tevanian's testimony. First, Edelman showed that Apple was interested in collaborating with Microsoft on multimedia products, and even had proposed that Microsoft replace its proprietary technologies with QuickTime.

Edelman also introduced an internal Apple memo on how to deal with Microsoft. In a section titled "Why Microsoft needs us," one of the bullet points simply stated "DOJ."

"Doesn't that suggest that executives at Apple might leverage interest by the DOJ to obtain business concessions by Microsoft?" Edelman asked.

Tevanian said that it depended. "But when we have reached points in time where Microsoft would be unfairly using their power in the market, then we would remind them or even threaten them that we might involve the DOJ," Tevanian said.

Edelman also challenged Tevanian's claim that Compaq Computer chose not to license QuickTime because of pressure from Microsoft, which is vital to Compaq's business. In his testimony, Tevanian claims that Compaq executive Steven Decker told Apple: "We are very wary of bundling anything that would upset Microsoft."

But in videotaped deposition, Decker claimed his company only stopped shipping the product after Apple began charging for it. "We would be shipping QuickTime if Apple gave it away," he told an interviewer off-screen. Asked it he ever discussed Microsoft at the meeting with Apple, he replied: "I don't ever recall this."

 

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