WASHINGTON — A Microsoft Corp. executive acknowledged Wednesday that the software giant pressured certain Internet service providers to strongly promote Microsoft's Internet browser because many consumers, if given an easier way to choose, would have selected a rival product.
The statement appeared to contradict the assertions of Microsoft's lawyers and other executives, made earlier in the antitrust trial here against the company, that Microsoft's browser was gaining market share because it was technologically superior to one made by Netscape Communications Corp.
The Justice Department and 19 states allege that Microsoft's business deals with Internet service providers--which required them to heavily favor distribution of Microsoft's Internet Explorer browser in return for promotional space on the Windows desktop--violated antitrust laws by impeding Netscape's ability to distribute its browser.
But Microsoft Vice President Cameron Myhrvold defended the terms of the arrangements Wednesday, testifying that cross-promotional requirements were intended to promote competition, not hinder it. At the time many of the deals were signed--in 1996 and 1997--Myhrvold said, Microsoft had only a small share of the market for browsers.
"We were the Johnny-come-lately to the Internet," Myhrvold said. Because Netscape had a larger market share and greater brand recognition, "we did specifically ask Internet service providers to distribute Internet Explorer by itself. . . ."
The restrictions applied to all of the Internet service providers within a Windows "referral directory," including AT&T Corp.'s WorldNet service, EarthLink Network Inc. and Concentric Network Corp. Similar requirements also were agreed to by America Online Inc. and three other Internet service firms in exchange for promotional space on the Windows desktop.
As antitrust regulators began scrutinizing the deals, Microsoft last year voluntarily removed the promotional requirements on providers listed in the referral directory. The restriction continues to apply to AOL, however.