Microsoft Seeks to Bolster Antitrust Case Against Government in AOL-Netscape Deal

Strategic Insights -

The high-profile antitrust case against Microsoft entered a crucial phase as the company presented evidence to a federal judge to bolster its defense, arguing that the AOL-Netscape deal proves sufficient competition in the tech industry to undermine the government's charges. Microsoft's lawyers sought to show that the company is not a predator, but rather a victim, by presenting a seven-inch stack of internal AOL documents, including a confidential memo by Microsoft Chairman Bill Gates. However, the judge rejected the memo, citing that it was not sent to AOL. Microsoft's rebuttal also involved calling a hostile witness, David Colburn, an AOL senior vice president who had testified as a friendly witness for the government earlier in the trial.

Key Takeaways:

  • Microsoft presented a seven-inch stack of internal AOL documents to the court, including a confidential memo by Microsoft Chairman Bill Gates.
  • The judge, Thomas Penfield Jackson, rejected the Gates memo, citing that it was not sent to AOL.
  • Microsoft's lawyers sought to show that AOL's purchase of Netscape was a legitimate business move, rather than an attempt to undermine Microsoft's dominance in the industry.
  • David Colburn, an AOL senior vice president, was called as a hostile witness by Microsoft to testify against AOL's intentions to challenge Microsoft's Internet Explorer browser.
  • AOL executives debated whether to switch the online service's 17 million subscribers from Internet Explorer to Netscape's competing browser.
  • According to e-mail disclosed at the trial, AOL Chairman Steve Case mentioned that Microsoft might be constrained from retaliating against the online service.

Statistics:

  • The AOL-Netscape deal was worth $10 billion.
  • AOL has 17 million subscribers.
  • Microsoft presented a seven-inch stack of internal AOL documents.
  • The judge admitted nearly all the documents into evidence, with many remaining under seal.
  • Microsoft Chairman Bill Gates wrote a confidential memo regarding the Netscape deal, which was not disclosed to AOL.

Sources:

  • [1] "Microsoft Sought to Convince Judge that AOL-Netscape Deal Proves Competitiveness," Washington Post, October 22, 2000.