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MSFT offered incentives
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February 23, 1999: 2:13 p.m. ET
Federal prosecutors claim offer to Netscape violated antitrust laws
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NEW YORK (CNNfn) - A Microsoft Corp. executive Tuesday said the company offered Netscape Communications Corp. certain incentives in exchange for using Microsoft technology, an admission the government claimed demonstrates a violation of antitrust law.
Under redirect questioning by defense lawyers, Daniel Rosen, Microsoft (MSFT) general manager of new technology, stuck to his testimony that the company did not attempt to bully Netscape (NSCP) into ceding the lucrative Web browser market in exchange for developing products for computer network servers.
Government lawyers have pointed to a June 21, 1995, meeting, in which Microsoft attempted to coerce Netscape to stop competing with Microsoft, as an extreme example of how the Redmond, Wash.-based company uses its Windows monopoly to crush its competitors.
But under re-cross examination from lead Justice Department attorney David Boies, Rosen said Microsoft did offer incentives to the rival Web browser maker to include Windows 95 technology within its products.
Boies later said Rosen's statement was a significant concession because, in the context of Microsoft holding monopoly power through its Windows operating system, any incentives offered to Netscape amounted to a violation of antitrust laws.
Microsoft countered that its dealings with Netscape were simply everyday business practices and that the company was merely offering to help Netscape make its products work better with Windows.
"We have a working relationship with Netscape as an ISV [Internet service provider]," said William Neukom, Microsoft general counsel. "What we have is a poster-child example of how high-tech companies are negotiating."
PC makers free to choose
Separately, Microsoft released the direct testimony of Joachim Kempin, senior vice president in charge of the company's OEM sales group.
Kempin, Microsoft's 10th witness in its federal antitrust trial in Washington, refuted government allegations that the company prohibits computer makers from installing non-Microsoft Web browsers on their PCs.
One of the government's key charges is that through Microsoft leverages its Windows monopoly power to prohibit the distribution of Internet software and services from its competitors. Microsoft, however, has said that's not true.
"OEMs are completely free to add any software they like to a personal computer running Windows," Kempin said. "And they are free to place an icon for such software directly on the Windows desktop. In fact, OEMs do this all the time, thus providing their customers with instant access to a wide variety of software products installed on their computers."
Kempin added that computer makers are also "free to give non-Microsoft software products greater prominence than Microsoft software installed on their computers."
Microsoft shares climbed 5-1/2 to 154-5/16 in afternoon trading. 
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Microsoft
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