A chief executive officer of an interactive television software
company faced accusations in court that he had reversed his
position on favouring a break up of Microsoft to help "entice"
Microsoft into selling its interactive television division to his
company.
Mitchell Kertzman of Liberate Technologies is the ninth witness to
testify for the non-settling states in the third week of the remedy
phase of the Microsoft antitrust trial. He took the stand to
testify on the threat posed by interactive television middleware to
the Windows operating system.
Set-top boxes have the potential of turning interactive television
into a "major platform" capable of competing with PCs, Kertzman
said in his written testimony.
But Kertzman faced aggressive questioning by Microsoft attorney
Daniel Webb, who argued that Kertzman wanted tougher remedies "only
to improve Liberate's competitive advantage over Microsoft".
Kertzman denied the accusation and said he was only seeking a level
playing field for interactive television makers.
Webb also charged that Kertzman had been "an outspoken advocate" in
press statements of breaking up Microsoft, which Kertzman did not
deny.
Webb focused on a meeting involving Kertzman and Microsoft
officials in February 2001. At that meeting, Webb said, Kertzman
wanted to find out whether Microsoft was interested in selling its
own interactive television division to Liberate.
Webb alleged that Kertzman told Microsoft officials that if
Microsoft would agree to his proposal, "you could be bought off
[from] your advocacy" of a harsher remedy for Microsoft.
The remedy hearing was designed to allow District Court Judge
Colleen Kollar-Kotelly to evaluate remedies to Microsoft's
anticompetitive behaviour that have been proposed by the
non-settling states, the District of Columbia and Microsoft.
Those remedies include a provision requiring Microsoft to give
companies access to its source code. The proposed settlement agreed
to by Microsoft, the Bush administration, and nine other states
last year requires Microsoft to disclose application programming
interfaces, the doorways between programs, but it does not give
competitors direct source code access.
The non-settling states have also asked the court to make the
software code for Microsoft's Internet Explorer Web browser open
source - something seen as a way of denying the company the
benefits of its illegal conduct.
In response to Webb's questioning, Kertzman said the meeting was
only intended to explore a possible deal. "I was only there to see
if there was some interest in the possibility," he said.
Kertzman denied any hint that there was a
quid pro quo
arrangement and said he had changed his view well before. Kertzman,
in his written testimony, said he could offer "no testimony as to
whether Microsoft has attempted to illegally monopolise the
interactive television market".
Instead, his testimony focused on how set-top technology is "a
major platform" attracting applications developers and how the
proposed remedy will do little to "reverse independent interactive
television/set-top technology as a competitive threat to
Microsoft's business in the PC operating system market".
Among the state remedies that Kertzman said are critical is one
that required Microsoft to adhere to industry standards to or
continue to support industry-compatible standards, even if it
chooses to create its own implementation of a standard by adding
its own extension. Without open standards, "one large company could
tilt the market toward its own, proprietary implementation of a
standard by simply using deception," he said.
Interactive TV can deliver a range of services now delivered by
PCs, such as e-mail, Internet access, instant messaging and
streaming media.
Liberate considers Microsoft as its direct competitor in the
interactive television arena, although Webb pointed out that the
company has 300,000 deployments of technology to its cable
customers, while Microsoft has none.
Liberate is the market leader and produces a better technology than
Microsoft's, said Webb, "but want a remedy to improve [Liberate's]
competitive position".
Kertzman said that his only interest is to shed some light on the
proposed remedies sought by the nine states that have refused to
sign the Bush administration settlement. Those states believe
tougher remedies are needed to keep Microsoft from squashing
technologies not covered in the settlement, such as handheld
devices and interactive TV.