Apple executive details alleged threats, sabotage attempts by Microsoft

Microsoft pressured the financially strapped Apple Computers to abandon its multimedia Internet software product in an attempt to gain control of that market, an Apple executive told government lawyers.

In return, Microsoft told Apple it could have the much smaller market for software editing tools that help create multimedia content, according to the testimony by Avadis Tevanian Jr., Apple's senior vice president of software engineering, released late Friday in the government's antitrust case against Microsoft.

Apple rejected the proposal, prompting Microsoft to use its market influence to discourage companies from using Apple's QuickTime software, which lets people hear audio and watch video across the Internet. The software was in direct competition with Microsoft's Netshow program.

Microsoft called the claim ``false and completely without merit'' in a statement it released in response to Tevanian's testimony, which, like that of all witnesses in the case, was submitted in writing. Microsoft attorneys were expected to begin cross-examining Tevanian on Monday during the antitrust trial.

Earlier this week, the government introduced documents portraying other Microsoft attempts to bully its competition. A handwritten note from Apple's chief financial officer, Fred D. Anderson, said Microsoft had threatened to stop making its popular Office business software for Apple's Macintosh computers.

``Apple needed to ensure that Microsoft would continue to provide MS Office for Mac, or we were dead,'' Anderson wrote.

Tevanian backed up the claim in his testimony: ``Microsoft was aware that Apple desperately needed to maintain support for Microsoft Office for Macintosh.''

Tevanian also claimed that Microsoft took steps to sabotage QuickTime so that it would have problems on computers that used Microsoft's browser software, which allows people to view the Internet. Apple engineers tried to fix the glitches on their own but ultimately had to call on Microsoft for help.

Those calls led to discussions that resulted in the August 1997 surprise announcement of a partnership between the two companies. The deal included a $150 million investment in Apple by Microsoft and called upon Apple to distribute Microsoft's browser software.

Many Apple employees and executives opposed the deal with Microsoft, Tevanian said.

``If Microsoft had not exercised its monopoly power in the office application market by threatening to stop supporting Office for Macintosh, Apple would not have resolved the disputes on the terms outlined,'' he said.

The issue of browsers is a key issue in the government's antitrust charges against Microsoft. The government claims that Microsoft illegally used its market influence to stifle competition and reach into other markets - like that for Internet browsers. Its key charge is based upon on an alleged offer Microsoft made to divide the browser market during a June 1995 meeting with executives from Netscape Communications Corp.

``Microsoft does not hesitate to use its operating system monopoly power and application program dominance to try to eliminate competition, acquire control of new markets and block innovation that could challenge its position,'' Tevanian said. ``In its recent dealings with Apple, Microsoft has used its power to acquire significant advantages for its Internet browser and impede Apple's QuickTime technology.''

Microsoft denies it forced Apple to abandon the multimedia market. Its meetings with Apple executives over QuickTime came about because Microsoft was interested in ``combining the great work that both companies had done on multimedia playback and streaming media technologies to provide better solutions for customers,'' the company said in its statement.

``These kinds of discussions go in the software industry every day.''