Novell offered Microsoft help in antitrust case

10.00 am

WASHINGTON - A Novell executive told a federal court yesterday he once offered to help Microsoft fend off the government's antitrust case if Microsoft would help Novell's networking software work better with the Windows operating system.

Novell chief technology officer Carl Ledbetter, under questioning by a Microsoft attorney, said he told a Microsoft official in February 2000 that Novell would "make sure that it was well-known" to government officials that Microsoft had reformed if Microsoft would help fix Novell's inter-operability problems with Windows.

"We were hopeful we could induce Microsoft to become aware that having better interoperability with us could help them with their legal problems," Ledbetter said.

Ledbetter was one of two witnesses to take the stand against Microsoft at the end of a second week of hearings into what antitrust sanctions should be imposed on the software company for illegally maintaining its Windows monopoly.

An executive from No. 1 handheld computer maker Palm, told the judge that Microsoft moved to share a key programming tool with Palm only after learning that Palm was participating in the antitrust case against the software giant.

Nine states are seeking stronger remedies in the four-year-old case and have refused to sign a proposed settlement reached in November between Microsoft and the US Justice Department.

Ledbetter came under tough questioning as Microsoft tried to discredit the motives for his testimony that Microsoft had withheld critical information needed to make competing internet server software work well with Windows.

The Novell offer came at a time when Microsoft was engaged in an earlier effort to settle the case. Three months earlier the original trial judge had determined Microsoft had monopoly power and had appointed a distinguished appellate judge in Chicago to oversee settlement talks.

Novell officials had already met with the Justice Department to complain that Microsoft was using anti-competitive tactics against it.

"Carl made clear that if we did this deal with Novell, he would talk with the DOJ and certain senators," Microsoft attorney Michael Lacovara said in court on Thursday, quoting from Microsoft executive Marc Kuperstein.

Ledbetter disputed that characterisation, but admitted that he told Microsoft, "We would be willing to help them if they were willing to be more cooperative.

"If you are willing to behave in a different way with the industry, particularly with us, we'd make sure that was well-known, and if that had some sort of public relations value or legal value, then that would be terrific for us," Ledbetter said.

Microsoft has long accused Novell and other competitors such as Oracle Corp. and Sun Microsystems Inc. of being behind the landmark antitrust case.

The remedy hearings before US District Judge Colleen Kollar-Kotelly are expected to run into May. The judge is also considering whether the proposed settlement meets a required public interest standard.

The nine non-settling states want Microsoft to sell a stripped down version of Windows that would allow computer makers to replace Microsoft features like the internet browser with rival middleware products.

They also want Microsoft to disclose much more of the inner workings of Windows to competing software developers and say the remedies should help newer technologies like handheld computers and interactive television devices.

The proposed settlement would give computer makers greater freedom to feature rival software on the Windows desktop.

Microsoft argues the state's proposals are extreme and the sanctions cannot go beyond wrongdoing upheld by a federal appeals court last year, mainly that Microsoft tried to crush Netscape's internet browser to preserve its Windows monopoly.

After Ledbetter, Palm executive Michael Mace took the stand and told Kollar-Kotelly the software giant had refused Palm access to the software development tool called VSIP and had set one-sided conditions for allowing Palm handhelds to work with Microsoft's .NET internet software.

Mace, chief competitive officer of Palm's software subsidiary, said Microsoft had refused to allow Palm into the VSIP, short for Visual Studio Integration Program, even though it was supposed to be open to the whole computer industry.

Mace said Microsoft had tried to barter Palm's entry into VSIP, which allows programmers to convert Windows applications to the Palm operating system, in exchange for Palm deploying Microsoft's .NET technologies, a suite of Web-based services.

Palm had tried to gain entry to the VSIP program for two years and was only now in the final details of a deal.

"Microsoft sent us the contract only after we had documented clearly that there was no resource barrier within the Visual Studio team itself, that Microsoft had been using VSIP entry to get leverage over us in the .NET negotiations and after it was becoming clear that Palm was participating in the current court proceedings," Mace said.