Microsoft "basically bribed" consumers to take its Internet Explorer browser in order to preserve its monopoly in operating systems software, a government witness testified in Washington yesterday.
Massachusetts Institute of Technology economics professor Franklin Fisher was appearing as a government rebuttal witness before Judge Thomas Penfield Jackson in US District Court, where Microsoft stands accused of anti-competitive practices.
The anti-trust trial, which began in October, resumed yesterday with each side authorised to present three more witnesses.
Fisher told the court that Microsoft maintains a monopoly position in the market for computer operating systems because of its "substantial ability" to alter the price of Windows, as consumers have practically no other choice.
The Windows system is now in use in nine of every 10 personal computers. The government alleges that by integrating its Explorer browser into Windows Microsoft sought to snuff out competition from Netscape Communications, which offers a rival browser.
Microsoft insists that "bundling" browser technology into Windows responded to a desire on the part of consumers for easier use and represented legitimate innovation.
By giving away Explorer, Microsoft "basically bribed people to take it and spent hundreds of millions of dollars on research and development", Fisher said under questioning by government attorney Mr David Boies.
"These are not profitable actions, except to protect its operating system market monopoly."
Fisher predicted that Microsoft's dominance of the market would last for "a number of years."
Most applications, such as those for games or text editing, run with Windows and not on competing systems.
Microsoft competitors, according to Fisher, "do not have enough money to overcome Microsoft's commanding lead."
The crucial Justice Department witness in this phase of the trial will be Mr Garry Norris, an IBM executive who in a written deposition has said Microsoft had charged his company higher prices for Windows because it had refused to stop selling a rival operating system, OS/2.
A verdict from Jackson is not likely to come before the end of September at the earliest, according to court sources.
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.
