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MS trial remedy phase closes with dramatic e-mail

Just three months after Judge Thomas Penfield Jackson ruled that Microsoft "placed an oppressive thumb on the scale of competitive fortune," a senior Microsoft executive sent a memo to Bill Gates and other officials recommending "underground" retaliatory actions against PC makers developing Linux-compatible devices.

In the August 2000 memo, Joachim Kempin, who then headed original equipment maker relations for Microsoft, complained that Intel was encouraging employees at large PC makers to support Linux and fund devices that would work well with the operating system.

Kempin said that to "play this the hard way" would "get more attention than we need."

Instead, he concluded that Microsoft should "work underground with the clear understanding to promote and advantage guys with less market share without declaring that to be our strategy. I would further try to restrict source-code deliveries where possible and be less gracious when interpreting agreements again without being obvious about it."

A Microsoft spokesman dismissed the memo as "random thoughts" that were never acted upon. Also, in a deposition,chief executive officer Steve Ballmer characterised the memo's author as "prone to hyperbole".

Memo in limbo
The memorandum was probably the most dramatic piece of e-mail evidence the nine non-settling states produced in the remedy phase, and they had planned to use it to strengthen their legal arguments that stronger anti-retaliatory provisions are needed in the final remedy.

However, the memo is in procedural limbo. Judge Colleen Kollar-Kotelly is clearly aware of it but has not officially admitted it into the record.

She has been very cautious about what does get entered. "This judge is a stickler for procedure," said Bob Lande, an antitrust professor at the University of Baltimore Law School.

Throughout the trial, Kollar-Kotelly has consistently ruled in favour of Microsoft on many procedural motions. But in court last week, she was a changed person. For the first time, she challenged both sides on a range of legal issues in an effort to sort out legal positions. Her questions appeared even-handed.

She focused attention on the key issue of whether the Court of Appeals' decision finding that Microsoft had illegally maintained its monopoly opened the door for the range of remedies affecting handhelds, set-top boxes, server operating systems and Web services.

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