Microsoft Remedy Hearings: Microsoft Drops Witnesses, States Present New Evidence

A surprise Microsoft decision to cull its list of witnesses has the nonsettling states and the District of Columbia scrambling this week. In a related development, the states had hoped to introduce new evidence proving that the company's proposed settlement with the federal government is ineffective, but Judge Colleen Kollar-Kotelly has indicated that she probably won't allow the evidence.

Microsoft's decision to cut back its witness list reflects the company's confidence in the outcome of the remedy hearings, in which nine US states and the District of Columbia seek stronger remedies than those the US Department of Justice (DOJ) and nine other US states proposed. Microsoft culled its witness list "after reviewing the progress we made so far in our case, as well as assessing the states' witnesses and what we believe are shortcomings in the states' case," a company spokesperson said. Microsoft originally planned to present 28 witnesses, compared to 16 for the nonsettling states. But the company now says it will call as few as 12 witnesses, including those who have already appeared. Four of the remaining witnesses are high-level Microsoft executives, including CEO Steve Ballmer and Group Vice President Jim Allchin.

Lawyers for the nonsettling states say they have received evidence that Microsoft's proposed remedy will continue to let Microsoft retaliate against PC makers. Attorney Howard Gutman read an email message from Dell Computer to Microsoft in which the PC maker complained about Microsoft's new contracts. "Dell cannot imagine that the intent of the [DOJ settlement] decree was an even greater degree of control by Microsoft," the email reads.

However, Microsoft lawyers complained that it's too late for the states to introduce new evidence. "We are in our case, [and] they have rested their case," Microsoft attorney John Warden told Kollar-Kotelly. "That is not what conduct of a trial is in our system, that a plaintiff presents a moving target to a defendant." Kollar-Kotelly indicated that she agreed with Microsoft but hasn't yet made a final decision in the matter. "You generally admit [evidence] during your part of the case," the judge told Gutmann. "I want to be very careful about this. I'm not going to do it off the top of my head."