Final government witness to confront Microsoft

Economist Franklin Fisher, a professor at MIT, says that Microsoft has used its monopoly in operating systems to illegally gain access to new markets. While it's not a startling new accusation, it comes from the final government witness, a man who help IBM defend itself during its own decade-long antitrust case.

"If Microsoft's conduct is not checked, it is very likely to create a world in which entry into browsers is difficult or impossible," Fisher writes in his written testimony, which was released Tuesday. "In that world, those that do not use a Microsoft standard will never prosper, and a critical opportunity for innovation that reduces or eliminates Microsoft's power will be lost."

Fisher's testimony explains in layman terms how Microsoft has abused its power, forcing companies out of business and dominating almost every market it enters. The trick, of course, is proving that this activity is damaging to consumers, who have so far benefited from the low prices and tight integration of Microsoft products.

"If software developers believe that Microsoft will engage in anti-competitive acts to impede any innovation that threatens its monopoly, they will have substantially reduced incentives to innovate in competition with Microsoft," he writes. "As a result, the range of software products from which consumers can choose will be limited, ultimately further reducing consumer welfare."

Fisher uses Internet Explorer as an example: Despite the fact that the product costs Microsoft over $100 million a year to develop, the company gives it away free so that Netscape can't compete. Before Internet Explorer became available, Netscape made millions of dollars each quarter on their own browser. As another example, Fisher says Microsoft created a "polluted" version of the Java programming language that only works on Windows, thereby undermining the "100% Pure Java" initiative launched by Sun.

Microsoft responded immediately to Fisher's testimony with a public statement.

"Professor Fisher seems unfamiliar with the concept of supply and demand," the company writes in its rebuttal. "Professor Fisher's written testimony is littered with errors, third-hand information supplied by the DOJ, and excerpts from out-of-context email."

But you can decide that for yourself if you're interested. The Fisher testimony is available on the Web at the U.S. Department of Justice Web site. You can find the Microsoft rebuttal on their own Web site

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