The Microsoft Trial June 24, 1999

The Microsoft Trial June 24, 1999

The Microsoft Trial June 24, 1999

Notes from different corners of the world.
June 24 1999 8:26 PM

The Microsoft Trial June 24, 1999

Dahlia Lithwick worked for two years in a family law firm in Reno, Nev. She is writing a novel about how divorce affects children.

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There are a fistful of myths in our legal system we all conspire to promote, despite our knowledge that they are not true. We believe the judge is always completely impartial until she's heard all the evidence. We believe the oath we take actually deters us from lying. We believe expert witnesses are rigorous scholars on a quest for truth. We believe these things because we need to. It's all too creepy otherwise.

We like to keep the old tooth fairy on life support, but we're always dancing around her hospital bed, pushing and poking for weaknesses. Thus, most litigators will question the neutrality of the opposing expert witness with a simple "How much did you get paid for your testimony here today?" This communicates subtly, yet efficiently, that expert witnesses are whores.

Not so the Justice Department's lawyer David Boies. Having asked that question of Microsoft's expert economist, MIT's Richard Schmalensee, yesterday, he strides right over to the life support system and yanks.

Boies is going at Schmalensee about whether he has perhaps overstated the magnitude of the threat posed by AOL to Microsoft. He places before the witness an AOL-Netscape-Sun document from last December that has been annotated with tiny Microsoft scribbles by someone. Luckily, in this trial it doesn't matter who scribbled or when. All that matters is that the notes purport to summarize Bill Gates' reactions to the document and that reaction is: "platform threat--AOL doesn't have it in their genes to attack us on the platform space."

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Boies asks why Schmalensee didn't take that into account when calculating the extent of AOL's threat. Schmalensee indicates that the comments were "outweighed" by what he knew of AOL's internal discussions about its plans.

Boies asks Schmalensee, "Is the extent to which you're interested in seeking out information related to the extent of your statements here?"

Schmalensee, does a creditable impression of a kicked puppy, and replies, "I'm sorry Mr. Boies, is that just a blanket challenge to my ethics? How am I to interpret that?"

Boies replies that he wasn't referring to Schmalensee's ethics "explicitly" but goes on to ask Schmalensee to grant "that you are here at least in part as an advocate for your client."

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Says Schmalensee, "I owe my client effective presentation of the facts as I understand them. I owe the court an honest and serious effort to find out the truth." He adds, "I put 30 years of investment into a scholarly reputation at risk ... I'm trying to stay on the right side of it." Had Schmalensee added, "I am a brilliant empiricist being paid obscenely to take a position while appearing neutral," he could not have put forth a more succinct formulation of the bizarre role of the expert witness in our legal system.

In any event, the emperor is without his clothes now. The irony of the fact that David Boies and Microsoft's Michael Lacovara are also being paid to look intellectually rigorous while minimizing and disparaging the merits of the other side's position is lost on no one.

Most of the morning--the last morning of testimony in the Microsoft trial--goes to a plodding cross-examination of Schmalensee by a Boies desperate to discredit the witness but somehow unable to pin him down. At least an hour goes to Boies' effort to elicit Schmalensee's admission that the survey data he used to calculate the Netscape browser share was fraught with error since at least 20 percent of the respondents were even more confused by the questions than the press is. The rest of the morning goes to Boies' failed effort to get Schmalensee to admit he's a whore. After lunch, at least 90 minutes of cross-examination time goes to demand elasticity and predatory pricing. The feeling in the courtroom is distinctly Last Day of School. Knees are jiggling, pens are tapping, everyone's eyes are on the clock.

The best part of the afternoon comes in the form of a question from Judge Thomas Penfield Jackson, who's been scrawling in his lime-green notebook all day. His question to Schmalensee starts: "Assume Microsoft is a monopolist ...?" No but tell us, judge, what you're really thinking.

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Later, Schmalensee, who has been rope-a-doping Boies all afternoon with evasions and generalized overuse of the word "plausible," apologizes for "working too hard to deconstruct myself." Hate it when that happens.

All day, there's been a buzz among the press corps that Boies has some shiny silver bullet he's waiting to bust out. Something about Microsoft's intent, maybe. Some document up his sleeve. All this tiresome rehashing of market shares and elasticity is just building up the perfect arc of suspense for the Big Bang. We wait. We look at the clock. I wonder idly what a "smoking gun" in an antitrust case might look like. A secret videotape of Bill Gates and his tiny clone, Mini-Me, rolling out a monster "laser" and demanding world dominion?

Well, almost as good would be Brock Meeks of MSNBC tripping over himself as he careens into court at 3:40 this afternoon two steps behind a hard copy of a story posted moments earlier on the MSNBC Web site. The printout travels along the dugout of the Microsoft team, while another makes its way from the DOJ paralegal to Joel Klein, the assistant attorney general for the antitrust division at the Justice Department.

At 4:50, Microsoft attorney Michael Lacovara stands for his redirect. After a few preliminaries, Lacovara puts into evidence Defendant's Exhibit 2816, an article posted on MSNBC two hours earlier. The article is called "AOL in Talks To Enter PC Business." It is about AOL's talks with Microworkz Inc. about creating an "AOL-PC." This computer won't run on a Microsoft operating system, and it is, to put it simply, exactly the device Schmalensee has been describing all week as the future of high technology and the reason Microsoft cannot be said to have a monopoly.

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Lacovara asks no questions about the article. The judge smiles and says, "I can't say you haven't brought me current," thanks the support staff, and closes the trial. He modifies the scheduling order so that each side must submit their proposed findings of fact by in August, with closing arguments to begin on September 21.

Microsoft has been arguing for months that Justice has been carrying AOL's water and beating up on Microsoft unfairly. The trial ends on this simple download: The market is rife with competition and Mr. Gates was wrong about one thing: AOL does have it in their genes.

* * *

A correction arising from yesterday's thought on the hourly rates of the Microsoft trial. My Microsoft-trial foster parent, David Lawsky of Reuters, did the calculation of Bill Gates' $35,000 earnings in 5 minutes at my request. For the record: He does not believe that the calculation done was mathematically defensible, nor does he advise any of you seeking to invest $90 billion to do so in an account bearing 4 percent interest.

Click here   for dispatches from the last session of the Microsoft trial between October 1998 and February 1999.