WASHINGTON, D.C. – A top Microsoft executive flatly denied he once threatened to cut off rival Netscape’s “air supply,” last night – setting the stage for a huge confrontation with Justice Department lawyers over a critical charge in the antitrust trial of the software giant.
Of the thousands of pieces of e-mails and documents presented at this historic trial, the quote from Paul Maritz, Microsoft’s group vice president, in which he told Intel executives at a 1995 meeting that Microsoft would cut off Netscape’s air supply by giving away its browser for free has been the most memorable – and potentially the most damaging.
But in written testimony released last night, Maritz denied ever making the comment.
“I told Intel that Microsoft’s approach was to develop and promote high quality implementations of Internet standards, to integrate Internet technologies into Windows and to introduce new functionality in order to promote use of the Internet,” Maritz said.
“I never said, in the presence of Intel personnel or otherwise, that Microsoft would cut off Netscape’s air supply, or words to that effect,” he added.
The bold statement directly contradicts sworn statements from Intel Vice President Steven McGeady earlier in the trial, setting the stage for a potentially explosive, make-or-break moment when he’s cross-examined by government attorney David Boies on Monday.
McGeady recalled that Microsoft executives were increasingly concerned about the potential that Netscape’s popular web-browsing software might threaten Microsoft’s Windows juggernaut.
Microsoft at the time decided to bundle its own Internet Explorer browser within the Windows operating system and gave it away for free in order to deprive Netscape of its main source of revenue, McGeady recalled as he recited Maritz’s “air supply” quote.
“The phrase was so far out of bounds with what I consider to be an acceptable business practice. It stuck out clearly in my mind,” McGeady testified.
Maritz, who runs Microsoft’s Windows program is the highest-ranking Microsoft executive scheduled to take the stand at the trial. He is third in the company’s seniority chain outranked only by the company’s multibillionaire chairman, Bill Gates, and president, Steve Ballmer.
He is an especially important witness to both sides because his name appears on most of the explosive e-mails the government has presented at the trial to bolster its case that company executives were bent on using the Windows monopoly to bully allies and squash competitors.
Maritz also is denying another major government charge: that Microsoft initially tried to illegally divide the Internet browser market with Netscape before launching its scorched-earth campaign to drive it out of business.
Maritz attended the crucial June 1995 meeting with Netscape CEO James Barksdale in which the alleged market-division proposal was made.
But he said in his testimony: “Here I would simply like to make clear, as the most senior Microsoft executive representative to meet with Mr. Barksdale that the one meeting I had with him was, by his own account, cordial and contained not even a hint of market division, and I never instructed Microsoft personnel to seek a “division of the market,” nor do I believe such a proposal was even made.”