Attorneys for the non-settling states in the Microsoft remedies trial continued to attempt to discredit the software giants expert economist Wednesday by stressing his former relationship with Microsoft and use of different data to make his analyses.
Steven Kuney, an attorney representing the non-settling states displayed evidence that Microsoft expert economist witness, Kevin Murphy, a University of Chicago professor, has worked as a consultant to Microsoft for up to five years and that every article Murphy has published on the econmics of software has been funded at least in part by Microsoft.
In addition, while under cross-examination, Murphy admitted that he used data different from that used in economic analysis during earlier phases of the case, particularly during the district court trial.
“What I did was go back, use the same conceptual idea and apply that to a narrower focus,” Murphy said.
Kuney then challenged Murphy on whether Microsoft had changed its behavior, particularly the 12 acts found to be anti-competitive and illegal byt the U.S. Court of Appeals, since the period beginning when the liabilities trial ended in 1999.
Murphy “some of these acts” did continue. However, he said his conclusion was that the acts did not harm competition nor consumer welfare. He added that eventually Microsoft stopped the so-called “bad acts.”
Murphy said he believed the courts scrutiny forced Microsoft to change its behavior. “You dont think this proceeding has had an impact,” Murphy asked.
Kuney then attempted to show inconsistencies in Murphys opinions where Murphy acknowledged he had uncertainty about some of the issues in Microsofts remedy proposal. However, when asked directly whether the Microsoft remedy proposal was appropriate, Murphy said, “They take the right general approach.”
Later, under cross examination, Murphy criticized the “unbinding provision” of the non-settling states proposal, which calls for Microsoft to deliver a version of Windows stripped of certain middleware – a so-called modular version of the popular operating system that would enable OEMs to put in products that compete with Microsofts.
“This is giving OEMs incentives to provide less to consumers,” Murphy said. “To take stuff out…as an economist that is not good to me. Thats not what enhances benefits to consumers. I would say that Ive looked at whether this is a good proposal or a bad one. I dont think this gives consumers more choice, it gives them less. I think it would be bad.”
Kuney also asked Murphy whether he thought parties that may seek to sue Microsoft in the future would first assess whether the behavior that got the company into legal trouble in the first place had been adequately addressed.
“I would assume theyd be motivated greatly by their ability to collect damages,” Murphy said.
Bringing up particular litigation involving AOL Time Warners Netscape Navigator and Sun Microsystems Inc.s Java, Kuney asked Murphy if they should not be awarded damages.
“Im not positive, I dont think they would,” Murphy said, although he said the companies could be harmed in other ways than by competition.
“If there is no significant harm to the companies, then the private litigants should collect no damages?” Kuney asked.
“That would be like dividing zero by zero, right?” Murphy replied, to peals of laughter from a row of his colleagues and supporters in the courtroom.
Kuney also asked Murphy about fragmentation in the operating system space, particularly about fragmentation in Windows given the various versions.
“The Windows OS in general has had a large degree of backward compatibility and in some sense forward compatibility,” Murphy said.
Murphy will be continue on the witness stand Wednesday afternoon and will be followed by Scott Borduin, CTO of Autodesk Inc., if time allows.
