Former Intel Exec Slams Microsoft Culture

In court testimony today, Steven McGeady likened Microsoft's culture to that of the "Donner Party" of settlers who turned to cannibalism.

Former Intel Corp. Vice President Steven McGeady once likened Microsoft Corp.s culture to cannibalism, reflecting his opinion that some of the software companys business practices are distasteful, McGeady testified in court Tuesday just before lunch.

The testimony, in the tenth day of the case brought by nine states and the District of Columbia seeking remedies for Microsofts anti-competitive conduct, came in the course of cross-examination by Microsoft attorney Dan Webb. McGeady recalled a high-level meeting between Intel and Microsoft employees in which he responded to a remark about "hungry" Microsoft employees with a reference to the "Donner party." (The testimony incited much laughter in an otherwise somber courtroom.)

Questioning whether McGeady personally dislikes Microsoft, Webb held up an article from the November 2000 issue of Wired magazine and a recently published book on the antitrust case, in which McGeady is quoted calling Microsoft "evil" and making other critical remarks. McGeady responded that he did not approve of some of Microsofts corporate culture and business practices.

"Im quoted saying all sorts of things that should probably have gotten my mouth washed out with soap," McGeady said. "I know people at Microsoft, and in many cases I like them."

McGeadys testimony focused on his contention that the proposed settlement that Microsoft agreed to with the Department of Justice and nine other states in November would not be sufficient to prevent retaliation and other anti-competitive conduct by the Redmond, Wash., company.

Earlier in the day, Gateway Inc. counsel Anthony Fama testified that he perceived a threat of retaliation from Microsoft during a meeting in December 1999, in which a Microsoft official said he did not want his statements "being quoted in the courts findings" or "fed back to the Department of Justice" by Gateway. "It was as much the way he said it as the words that I perceived as a threat," Fama said.

"You spent six years at the CIA, and you thought that was a threat?" Microsoft attorney Richard Pepperman asked Fama.

Fama also testified that new Microsoft licensing terms implemented under the proposed settlement that Microsoft and the Department of Justice agreed to in November were less favorable to Gateway than previous terms. He noted specifically provisions regarding patent infringement, certificate of authorization return policies and license termination. Pepperman asked Fama whether Microsoft would ever be able to terminate a license agreement under the dissenting states remedy proposal, and Fama replied that the software maker could pursue alternative forms of legal relief.

Fama charged that new volume discount levels established under the proposed DOJ settlement discriminate in favor of the top three OEMs. "Why does Microsoft set the bare minimum discount at 6 million PCs, when only three OEMs would qualify?" he asked. "That doesnt seem reasonable."

Pepperman questioned Fama whether it was not logical that the computer makers with the highest volumes would receive the highest discounts. He also asked Fama about recent investments in Gateway by AOL Time Warner, which is a Microsoft rival.

Also today, Judge Colleen Kollar-Kotelly asked the Department of Justice whether states on their own can pursue remedies in a federal antitrust case. Microsoft asserts that they cannot and has asked the court to dismiss the case.

Related stories:

Software Maker Says Microsoft Settlement Wont Help

Red Hat CTO: Microsoft Quashed Interest in Linux

Special Report: Microsoft vs. DOJ

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