Microsoft Remedy Hearings: Judge Won't Allow Retaliation Memo

In a major blow to the nonsettling US states that are pursuing stricter remedies in the Microsoft antitrust case, Judge Colleen Kollar-Kotelly said Friday that she won't let the states' lawyers enter an internal Microsoft email message into the official court record. The 2-year-old memo threatened retaliation against PC companies that allied with Windows competitor Linux. Lawyers for the nonsettling states tried to introduce the memo in court twice: once during Microsoft Chairman and Chief Software Architect Bill Gates's cross-examination and again near the close of the remedy hearings. But both these instances occurred after the states had presented their case.

"The litigation process presumes that the parties will present their case only once and will present their best arguments at that time," Kollar-Kotelly said in her order, noting that the memo presentation came too late. She also said that entering the message now would "cause prejudice to Microsoft" and noted that the states didn't provide sufficient reason for her to do so.

In the controversial August 2001 email message, Microsoft Vice President Joachim Kempin told Gates that microprocessor-maker Intel was contacting PC makers "who are not friendly [to Microsoft] in the first place and ... encouraging them to go to Linux." Kempin said that he planned to "stop any go-to-market activities with Intel [and] only work with their competitors [such as AMD]." After recommending that Microsoft withhold technical information from PC makers that went along with the plan, Kempin explained other ways in which Microsoft could express its displeasure. "I would further try to restrict source-code deliveries where possible and be less gracious when interpreting agreements--again without being obvious about it," Kempin wrote. Gates never responded to the memo, but he did forward it to Microsoft CEO Steve Ballmer.

The Microsoft remedy hearings ended last month, but both sides will present closing arguments June 19. According to sources close to the case, Judge Kollar-Kotelly will issue a ruling late this summer.