- The Washington Times - Tuesday, April 23, 2002

Microsoft Chairman Bill Gates took the stand yesterday and said proposals to punish the software giant would harm it by fragmenting its Windows operating system.
The world's richest man and Microsoft co-founder attempted to deflect further punishment for its antitrust violations.
Because the proposed penalties would require Redmond, Wash.-based Microsoft to divulge blueprints and technical information about how some of the company's products work, the company would suffer "a massive transfer of Microsoft's intellectual property rights" to competitors, Mr. Gates said.
Mr. Gates made his long-awaited appearance in the 4-year-old antitrust case early yesterday afternoon, arriving with his wife, Melinda. He also appeared in a videotaped deposition in 1998.
Sitting under an American flag to the right of U.S. District Judge Colleen Kollar-Kotelly yesterday, Mr. Gates spent more than four hours engaged in a complicated technical discussion of software definitions with Steven Kuney, an attorney representing the states, while they debated the proposed penalties' implications on Microsoft.
Brendan V. Sullivan Jr. was expected to cross-examine Mr. Gates because he is the chief attorney for the states, and the decision to have Mr. Kuney question Miscrosoft's co-founder was considered a surprise, even though Mr. Kuney questioned Mr. Gates in his deposition in February.
Mr. Gates and Mr. Kuney often haggled over the definitions of technical jargon yesterday.
Mr. Gates said the additional sanctions would not only erode the value of its Windows operating system which runs an estimated 90 percent of the world's personal computers and make it easy for competitors to clone Windows, but also reduce the amount of new software that Microsoft develops.
At one point, he suggested Microsoft might need to lay off half of its 15,000 workers or pull Windows from the marketplace as fallout from the proposed penalties.
"The practical effect would be to cripple Microsoft as a technology company," Mr. Gates wrote in 150 pages of written testimony that was submitted with his appearance.
Mr. Gates said a proposal by the states forcing Microsoft to make a stripped-down form of Windows that would allow computer makers to remove software and substitute it with software made by other companies would make the Windows operating system less stable.
"The applications would fail," he said.
The group of nine states and the District want Microsoft to market the stripped-down version of the Windows operating system in order to promote competition in the industry. The states say stronger measures are needed to prevent Microsoft from abusing its Windows monopoly, particularly against recent computer technologies like handheld devices and interactive media.
But according to Mr. Gates, a stripped-down version of Windows would confuse consumers because "when you get an existing application, you wouldn't know for which of the various fragmented versions of Windows it would be compatible."
The states also want to make Microsoft release the software blueprints of its Internet Explorer Web browser and let other companies translate its Office business software to rival operating systems. But Mr. Gates argued that the requirement would let rival technology companies create competing Windows clones.
Mr. Gates identified AOL Time Warner, Sun Microsystems, Gateway, Novell and Oracle as among the companies likely to make Windows alternatives.
Mr. Kuney's cross-examination of Mr. Gates will resume today.
An appeals court last year ruled that Microsoft illegally protected its Windows monopoly, but the same court overturned an order by U.S. District Judge Thomas Penfield Jackson to break up the company.
The Justice Department and nine other states settled the case, and their deal with Microsoft is awaiting court approval.
Connecticut, California, Iowa, Kansas, Florida, Massachusetts, Minnesota, Utah, West Virginia and the District of Columbia are pushing for tougher sanctions against Microsoft to prevent it from abusing its Windows monopoly.
Shares of Microsoft fell $1.61, or 2.8 percent, closing at $55.59 a share on Nasdaq.

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