Audio Nation's first class-action trial against Microsoft underway (story audio) Photos Plugs and sockets St. Paul businessman Jim Burt Microsoft associate counsel Jim Wallis Your Voice Join the conversation with other MPR listeners in the News Forum.

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Nation's first class-action trial against Microsoft underway
by Jeff Horwich, Minnesota Public Radio
March 16, 2004

In opening arguments, the plaintiffs' attorney often compared Microsoft's MS-DOS and Windows programs to a plug and socket. The suit claims Microsoft designed its "socket" so it would not fit other "plugs," i.e. competitors' computer programs. (Image Courtesy of plaintiffs' legal team)

Gordon v. Microsoft is the first class action lawsuit against the giant firm to go to trial. On Monday lawyers suing Microsoft began making their case that anti-competitive behavior by the software maker cost Minnesota consumers hundreds of millions of dollars.

Minneapolis, Minn. — To begin the trial, the 12 jurors got two basic lessons. One was a basic computer lesson: What's a PC? What is hardware? What is software? Jurors have a glossary of acronyms like "OEM," "IAP," and "GUI" that they'll need to decipher the case before them.

Their second lesson was in the federal anti-trust case against Microsoft, which concluded in the year 2000. That case had a number of twists and turns, but in the end it established many rather harsh facts about the software giant. The case found Microsoft pressured computer makers, deceived competitors, and otherwise used anti-competitive behavior to illegally maintain a monopoly in its Windows operating system.

Those facts apply to the case here in Minnesota. They're the jumping off point for the allegation that Microsoft owes money to perhaps one million people and businesses who bought Microsoft software here. Lawyers began making this case on Monday.

	St. Paul businessman Jim Burt

One business bringing suit is St. Paul food wholesaler Reclaim Center, Inc. President Jim Burt was on hand for the first day of opening statements. He says the company bought six to eight Windows licenses in the seven-year period covered by the case.

"That's all that there was available was this particular operating system, and it's all that I had to choose from," Burt said outside the courtroom. "No matter where I turned, whatever store I went to, the prices were all the same."

The suit claims Burt and the other class members paid extra not just for Windows, but for certain other Microsoft software as well.

"We're showing that Microsoft used their operating system monopoly, their Windows monopoly, and leveraged that in order to obtain monopolies in word processing and spreadsheet software and Microsoft Office," said Richard Grossman, a lawyer with the California firm Townsend, Townsend and Crew.

Inside the courtroom, Grossman's law partner, Eugene Crew, offered a spectacularly detailed opening statement. On a giant screen jurors saw dozens of internal memos from Microsoft, Intel and other technology companies. Clips from video depositions gave a hint of the hours of such tape that are to come, including a deposition from Microsoft Chairman Bill Gates originally recorded for the federal case. Gates is expected to testify in person in Minneapolis.

Crew tried to put the case in terms familiar to the Minnesota jurors. He asked them to consider Xcel Energy, their sole energy provider. Now imagine, he said, that Xcel gets into the business of making toasters. And every time another toaster-maker built a toaster that could be plugged into the power outlet in your home, Xcel changed the shape of the outlet so that only their toasters would work.

	Microsoft associate counsel Jim Wallis

This, Crew said, is much like the charges of technical sabotage against Microsoft: That deliberate booby traps in Microsoft software kept competitors' products from functioning correctly.

Crew introduced jurors to some companies that might have provided some price and product competition for Microsoft. Ever heard of GO Incorporated's tablet PC? How about an operating system by Digital Research Inc? Plaintiffs say unfair competition by Microsoft is the reason these companies are dead and gone.

Lawyers for Microsoft say many of the examples plaintiffs will use reflect nothing more than a highly competitive company, trying to triumph in a highly competitive market. They say winning the case depends on one simple question: Did Microsoft's actions harm or help Minnesota consumers?

To Microsoft associate counsel Rich Wallis, that's a no-brainer. Look at, for example, word processing and spread-sheet software.

"When Microsoft entered that business, these products sold at $495 apiece," Wallis said. "Since Microsoft entered this business, as in other businesses we've entered, the prices have gone down and down and down. So now you can buy an entire suite of products for less than they paid in the early 1990s. And these products are faster, they have more functionality and features, and they're easier to use."

Wallis's team will get its turn in front of the jury when their opening statements begin, perhaps as early as Tuesday afternoon.

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