Another Leaked MS Memo to Soothe Trial-Weary Employees.

By Rachel Chalmers

In the latest Microsoft internal memo leaked by solicitous insiders to an eagerly waiting press, Senior Corporate Attorney Dave Heiner tries to reassure employees that all is well with the company's antitrust trial, now in recess. Heiner admits that: "It is not easy for any company to be the subject of a full scale monopolization case brought by the US government." But he insists that in spite of popular - and maybe internal - perceptions, Microsoft's case is proceeding as planned. "Fortunately, lawsuits are decided on the basis of law and facts," he writes, "not allegations and mere hearsay."

Heiner first tries to drum up employee morale with a pep talk. Microsoft, he says, is on the side of ordinary people, against the invasive government. "We believe that the government's case against Microsoft is profoundly anti-consumer," he writes. "Developing innovative new technology and broadly distributing that technology is exactly what every computer company is supposed to do (regardless of its market share)."

Not only is the government in the wrong, he continues, but prosecutors have failed even to demonstrate their case. "Much of [the government's evidence] simply reflects the intensity of competition with the software industry, routine interactions among computer companies or internal discussions of ideas that were never implemented," Heiner explains. "Strong language is, however, not illegal."

So how to account for the perceived media bias against Microsoft, and the widespread opinion that the company is in legal hot water? "Given the tedious nature of court proceedings, most news accounts of the trial focus upon moments of seeming 'drama'," Heiner tells his readers, "even though such vignettes may be irrelevant to the likely outcome of the trial." Nor would this be the first occasion on which Microsoft has triumphed in the face of popular skepticism. Heiner urges his readers to: "remember that press coverage was quite negative in connection with both of our prior antitrust cases. In both cases, however, we won in court."

Heiner painstakingly restates Microsoft's answers to government allegations that the Redmond software giant stifled web browser distribution, unlawfully tied IE to Windows 98, imposed exclusionary contracts and committed other "bad acts." In short, Microsoft's position continues to be that every distribution channel remains open to Netscape and that there are clear benefits to ISVs, OEMs and consumers in including IE with the Windows operating system.

As for those allegedly exclusionary contracts, Microsoft points out that 22% of AOL users use Navigator, while contracts with ISPs and channel partners do not appear to have improved its market share at all. The "other bad acts" - meetings with Netscape and quarrels with Intel over Native Signal Processing (NSP) and Apple over Quicktime - Microsoft dismisses as late additions to a case it claims had no merit to begin with.

Heiner winds up with a note on the status of the trial. The case will resume in the middle of April, when each side may present up to three rebuttal witnesses. After that, the court will be briefed on the application of the law to the facts, and the combatants will make their closing arguments. Only then will Judge Jackson make his decision. Whatever the outcome, one or both parties are likely to appeal. Heiner, however, remains sanguine, at least when addressing employees. "We are confident that... Microsoft will prevail," he concludes.