Interactive television executive says Microsoft needs harsh penalties
WASHINGTON (AP) – Microsoft said Wednesday that reporting requirements proposed by nine states on Microsoft investments are too broad and could be used to cover purchases as simple as a couple of desktop computers or a handful of stock shares. While cross-examining Mitchell Kertzman, the head of a company that makes interactive television software, Microsoft lawyer Dan Webb said the reporting requirements would put Microsoft under onerous restrictions.
The requirement would cover almost any monetary deal Microsoft wants to make with technology or financial firms, and direct the company to give the states written notice 60 days before the deal is final.
“In an industry that moves as fast as this industry moves, you don’t think there’s anything unreasonable in expecting Microsoft to delay thousands and thousands of transactions each year and report them?,” Webb asked Kertzman.
Kertzman said Webb’s interpretation was extreme, and he would ask for clarifications if the penalty is imposed.
The nine states want U.S. District Judge Colleen Kollar-Kotelly to force Microsoft to create a stripped-down version of its flagship Windows software that could incorporate competitors’ features. The states also want Microsoft to be forced to divulge the blueprints for its Internet Explorer browser.
The federal government and nine other states settled their antitrust case against Microsoft last year for lesser penalties.
The original judge in the case, Thomas Penfield Jackson, ordered Microsoft broken into two companies after concluding that it illegally stifled its competitors. An appeals court reversed the breakup order and appointed Kollar-Kotelly to determine a new punishment.
Kertzman pointed to Microsoft’s extensive investments in cable and satellite companies worldwide – about $11.5 billion since 1997 – as reasons for why Microsoft should report its deals. That way, Kertzman said, the states would be warned if Microsoft intended to freeze out competition.
Webb noted that Liberate is still the leader in the emerging interactive television software market. Companies such as Comcast and AT&T use Liberate products even with a combined $6 billion Microsoft investment in both companies.
“Apparently you’ve done well with AT&T despite Microsoft’s investment,” Webb told Kertzman.
Kertzman replied that Liberate’s success came after Microsoft’s “repeated failure” to ship a working product. Liberate makes software that runs on interactive television boxes. Those boxes are slowly making their way into American homes, and could allow customers to make purchases, play games, or chat over the Internet with their television remote control.
Liberate’s technology is also based in part on Sun Microsystems’s Java programming language. The courts have ruled that Microsoft unfairly attacked Java by misleading software developers.
Microsoft has several initiatives in this arena, including “eHome,” a plan to turn Windows computers into a central media center for the home. The states say that as different devices continue to combine, a set-top box could have many of the same capabilities of a traditional desktop computer.
That could threaten Microsoft’s Windows monopoly, they say, and is therefore worthy of the court’s consideration.
States that rejected the government’s settlement with Microsoft and have continued to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.
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