Microsoft's anti-trust trial is set to resume tomorrow after a three-month recess with testimony from an IBM official who charges the software giant of improper anti-competitive practices.
Prior to the break, federal district court Judge Thomas Penfield Jackson urged Microsoft and regulators from the US Justice Department and an alliance of 19 states to consider an out-of-court settlement.
The US federal and state governments have accused Mr Bill Gates's company of engaging in anti-competitive practices, such as pressuring computer makers to install Microsoft products.
Microsoft put forward proposals for a deal and talks among the parties got under way in late March. But no significant advances have emerged to date.
The Justice Department has also charged that the software group bundled its Internet browser Explorer into its market-dominant operating system Windows to harm Netscape, which makes a rival browser.
Windows is now used in nine of every 10 personal computers worldwide.
Microsoft insists that the integration of the browser and the operating system amounted to legitimate product innovation and did not harm competition.
A verdict in the trial, which opened in October, is not likely to come before the end of September at the earliest, according to court sources.
When the proceedings resume this week, each side will call three witnesses, after which the trial will go into recess for 30 days to give the government and Microsoft time to give their interpretation of the facts.
The government plans to call Mr Garry Norris, who headed IBM's relations with Microsoft from 1995-1997, as well as two other witnesses - MIT economics professor Mr Franklin Fisher and Princeton computer science professor Mr Edward Felten - who testified in the first part of the trial.
Mr Fisher will testify first, followed by Mr Norris, according to court sources.
In his deposition, Mr Norris accused Microsoft of having charged IBM a higher price for its Windows operating system in retaliation for IBM's refusal to stop selling its competing OS/2 system.
Microsoft, which sold Windows to IBM for $9 per unit, sold Windows 95 for $46, according to Mr Norris.
Compaq and Dell, two close Microsoft partners, paid less than $40, according to industry sources quoted in The Washington Post.
Microsoft will call Mr David Colburn, vice president of America Online, Mr Gordon Eubanks, head of the corporate software maker Oblix, and Mr Richard Schmalensee, dean of MIT's Sloan School of Management. Mr Schmalensee testified in the first part of the trial.
The software maker was also set to exploit mergers between America Online and Netscape and a strategic alliance with Sun Microsystems which Microsoft says has upended sector dynamics and sharply weakens the government's case.
