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Microsoft trial, version 1.5
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April 27, 1999: 12:08 p.m. ET
Company set to depose executives from AOL, Netscape and Sun
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NEW YORK (CNNfn) - Microsoft Corp. and antitrust officials are inching their way toward the next phase of their historic antitrust trial as the software giant prepares to depose executives from America Online Inc., Netscape Communications Corp. and Sun Microsystems.
Microsoft lawyers will attempt to garner more details about the recent merger between AOL (AOL) and Netscape. As part of that deal, Sun Microsystems (SUNW) entered into a technology agreement with AOL.
The trial itself isn't scheduled to resume until mid-May, but presiding U.S. District Judge Thomas Penfield Jackson granted Microsoft (MSFT) permission to depose witnesses from the three companies involved in the deal.
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.
In particular, the government claims Microsoft undertook numerous actions with the sole intent of cutting off a potential threat to its monopoly power from Netscape.
Microsoft has long denied those charges, and company officials immediately pounced on the AOL-Netscape deal as proof that competition is healthy in the computer industry.
Shortly after that deal was announced, Jackson himself indicated that the alliance may change the dynamics of the computer industry.
Depositions to begin
On Wednesday, Microsoft will depose Peter Currie, Netscape executive vice president, in Washington. Michael Popov, Sun Microsystems chief operating officer, will give his deposition Friday in San Francisco.
The most anticipated testimony, however, will come from AOL Chief Executive Steve Case, who is scheduled to give his deposition in Washington May 7. Case also reportedly has been mentioned by both sides as a possible rebuttal witness when the trial officially resumes.
"Microsoft is going to try to establish that there is vigorous competition in the marketplace," said Spencer Waller, a professor at Brooklyn Law School. "They're going to try to get admissions that Microsoft has less market power than is apparent, or that this venture can take away from any market power it does have."
Waller said Microsoft lawyers also will probably try to use AOL's and Netscape's own words against them to illustrate that the companies themselves heralded the merger as a sign of healthy competition.
"They'll be pushing on what direction the market is taking and the issue of who is and who will be a competitive threat," Waller said.
But Waller noted that the latest round of depositions may not have a major impact on the outcome of the trial.
"Microsoft can only use this opportunity to poke holes in any weaknesses of the government's case that's already gone on in the courtroom," he said. "They can't introduce anything new here. I don't anticipate any surprises."
Delay in next phase?
The next phase of the trial, in which each side calls three rebuttal witnesses, originally was scheduled to begin as soon as May 10. That, however, is likely to be delayed at least one week to give each side another chance to discuss a possible settlement, the Wall Street Journal reported, citing sources close to both sides.
Both sides were scheduled to disclose their rebuttal witnesses Monday, but that was postponed because Jackson is hearing a criminal trial that's taking longer than expected.
Separately, deposition transcripts released Monday revealed that a Packard Bell NEC Inc. executive said Microsoft refused to let the PC maker impose its own limits on which Internet service providers (ISPs) its customers could easily access.
Government lawyers previously argued that Microsoft limits consumer choice by forcing ISPs to distribute its Web browser over Netscape's in order to merit placement in Windows' online services folder.
Microsoft shares fell 2-5/8 to 85-3/8 in morning trade. 
-- by staff writer John Frederick Moore
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