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Microsoft, Intuit square off
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January 4, 1999: 1:25 p.m. ET
Defense team rebuts charges that company's contracts are discriminatory
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NEW YORK (CNNfn) - After a nearly three-week holiday recess, the Microsoft Corp. antitrust trial resumed Monday with defense lawyers hammering away at a government witness' testimony that the software giant frequently requires other companies to sign exclusionary contracts involving the Windows operating system.
In 47 pages of written direct testimony, William Harris, president and chief executive officer of software maker Intuit Inc. (INTU), said his company had first-hand knowledge of Microsoft's (MSFT) discriminatory practices.
In June 1997, the companies signed a pact under which Microsoft agreed to place a link to Intuit's financial services Web site in the Windows 98 Active Desktop channel bar and the Internet Explorer Web browser.
In exchange, Harris said, he was informed that Microsoft Chairman Bill Gates personally required Intuit to refrain from striking any deals with Netscape Communications Corp. (NSCP), which distributes the rival Navigator browser.
Harris' testimony is important to the government's case because it could demonstrate the lengths to which Microsoft would go to destroy Netscape.
Harris also pointed out that Microsoft has the power to control which Web sites gain the largest audience through placement on its Windows Desktop.
"Creating a 'bias' on the screen in front of the computer user gives Microsoft substantial power to direct users to particular products, services and Web sites," Harris said.
Microsoft, however, countered that several Web sites have gained considerable popularity without Microsoft's help.
Microsoft's legal team noted that pornography sites are immensely popular and that Microsoft doesn't include any such sites on the Windows Desktop.
Harris' testimony also adds a new twist to the Microsoft-Intuit saga.
In 1994, Microsoft struck a deal to buy Intuit for $1.5 billion. Intuit makes the popular Quicken personal-finance software package, which has long held a market share advantage against Microsoft's Money product.
Though the Justice Department eventually blocked the proposed deal, Harris testified Intuit agreed to the buyout only because the company feared Microsoft would bundle financial software, called WinATM, with Windows in an effort to target Intuit, similar to the way the government claims Microsoft bundled Internet Explorer with Windows to target Netscape.
In response, Microsoft said it made no such announcements to bundle financial software with Windows at the time of the deal and has made none since.
"To this day, Microsoft has not added personal finance functionality to Windows, and Intuit continues to thrive as the leading developer of personal finance software," the company said in a statement.
Harris is the government's 11th witness. The Justice Department will call Franklin Fisher, an economics professor at the Massachusetts Institute of Technology, as its 12th and final scheduled witness.
The Justice Department and 19 states sued Microsoft for perpetuating its Windows operating system monopoly and leveraging that monopoly into the Internet.
Microsoft shares shot up 6-5/16 to 145 in midday trading. Intuit shares added 4-1/8 to 76-5/8. 
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