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Microsoft trial resumes
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June 1, 1999: 12:03 p.m. ET
Fed witness says software giant uses monopoly to charge higher prices
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NEW YORK (CNNfn) - An economist testified in the Microsoft Corp. antitrust trial Tuesday that the company is able to charge excessive prices for its Windows operating system because it holds monopoly power in that market.
The testimony by Franklin Fisher, economics professor at the Massachusetts Institute of Technology, underscores the government's attempt to prove that Microsoft's alleged anticompetitive behavior harms consumers.
Microsoft (MSFT) and the government were back in U.S. District Court in Washington after a three-month recess. The government called Fisher as its first rebuttal witness.
Fisher, who also testified for the government during the trial's first phase, said Microsoft is able to charge "super-high prices" and make "super-high profits" because it holds monopoly power with its Windows operating system.
Microsoft possesses a more than 90-percent market share in PC operating systems. One of the government's key claims is that Microsoft's behavior harms consumers as well as its competitors.
The company, however, argues that Windows' market-share figure alone doesn't constitute monopoly power.
Microsoft's own economic expert, MIT professor Richard Schmalensee, testified earlier in the trial that such technologies as handheld computers threaten Microsoft's Windows dominance.
But Fisher, under questioning from lead Justice Department attorney David Boies, characterized Schmalensee's analysis as deeply flawed.
Microsoft will recall Schmalensee as a rebuttal witness later in the trial.
The Justice Department and 19 states sued Microsoft last year for using its alleged Windows operating system monopoly to stifle competition in other segments of the computer industry.
Each side will call three rebuttal witnesses during the trial's second phase. Twenty-four witnesses have testified since the trial began in October.
Microsoft shares were down 1-3/8 at 79-5/16 in morning trade. 
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