Microsoft Antitrust Trial: AOL-Netscape Acquisition May Have Significant Impact

Strategic Insights -

The federal judge in the Microsoft antitrust trial, US District Judge Thomas Penfield Jackson, made an unusually candid comment that America Online's proposed acquisition of Netscape Communications might create a "very significant change" in the technology industry, potentially affecting the trial's outcome. The comment was made in response to a request by Microsoft's lawyers to examine AOL and Netscape documents related to the deal, which the judge granted, allowing the software giant to view material submitted to the Justice Department.

Key Takeaways:

  • US District Judge Thomas Penfield Jackson stated that the AOL-Netscape acquisition might create a "very significant change" in the technology industry, implying that it could affect the outcome of the Microsoft antitrust trial.
  • The acquisition could impact the market, with Judge Jackson saying it "very well have an impact on the market."
  • Microsoft's lawyers argued that the deal severely undercuts the government's case, as Netscape will have the marketing and technological heft of AOL to develop and distribute new versions of its browser.
  • Government lead attorney David Boies downplayed the impact of the remark, maintaining that "on balance, the facts will support the government's case."
  • Some legal analysts predict the deal will complicate the judge's efforts to find a remedy for Microsoft's conduct if he rules against the company.
  • The judge agreed to let Microsoft view documents related to the AOL-Netscape acquisition, while also allowing videotaped depositions to be accepted into evidence without being played in the courtroom.
  • Microsoft Chairman Bill Gates' deposition, along with 15 others, will be given to the judge and released to the public by January 4.
  • A PC maker executive testified that many customers want to purchase computers with Windows but without Microsoft's integrated browser, which the government argues is a monopolistic practice.

Statistics:

  • Microsoft's shares rose over $4 to $135.125, a record high, before closing for the day at $133.75, up $1.875, immediately after the judge's comment was reported.
  • The AOL-Netscape acquisition is valued at $4.2 billion.
  • 15 videotaped depositions, including one from Microsoft Chairman Bill Gates, will be given to the judge and released to the public by January 4.

Sources:

  • Newsbytes, "Microsoft Antitrust Trial: AOL-Netscape Acquisition May Have Significant Impact," (cited as NB)
  • Newsbytes News Network, http://www.newsbytes.com (19981217 /WIRES LEGAL, ONLINE, NETWORK, BUSINESS, PC, NETWORK/AOLGETNS/PHOTO)