Originally created 01/26/99

Microsoft executive denies making widely quoted comment.

WASHINGTON -- The government challenged a senior Microsoft executive Monday over his denial that he ever uttered an often-quoted phrase about his company's aggression toward a rival, that he once promised to "cut off Netscape's air supply."

The sensational phrase, which underscores the government's antitrust case against Microsoft, was attributed by one witness to Paul Maritz during a November 1995 meeting with Intel Corp.

As part of its lawsuit, the government alleges that Microsoft included Internet browser software free within its dominant Windows operating system to try to "crush" Netscape, whose browser was much more popular during the mid-1990s and earned tens of millions of dollars.

In a charge central to its case, the government contends that by flooding the market with its own free browser, Microsoft cut off Netscape's opportunity to earn profits on its software.

Maritz, though, flatly denied making the statements in written testimony submitted to the judge.

"I never said, in the presence of Intel personnel or otherwise, that Microsoft would 'cut off Netscape's air supply,' or words to that effect," Maritz wrote.

But Justice Department lawyer David Boies confronted Maritz on Monday with his sworn statements from last year. Boies said they represent a far less adamant denial than Maritz's current testimony.

"It's possible, but I just don't recall it," Maritz offered during earlier interviews with government lawyers. "I don't believe it's something that I would have said." He added that he "would be skeptical" if anyone attributed the comments directly to him.

Under questioning by Boies, Maritz said he recently reviewed the notes of three Intel executives at the 1995 meeting who did not remember the phrase.

"I don't believe my testimony to be inconsistent then with what I am saying now," Maritz said calmly.

"For a long time, it wasn't clear who at Microsoft would have said that," Maritz testified.

Another witness, Intel Vice President Steven McGeady, testified previously during the trial that Maritz and others from Microsoft met with executives in Oregon to discuss technology issues.

"Paul and some of the other attendees made some fairly colorful statements that stick out in my memory," McGeady testified. "... It was Microsoft's plan to cut off Netscape's air supply. By giving away free browsers, Microsoft was going to keep Netscape from getting off the ground."

Boies quizzed Maritz on Monday whether he ever complained to The New York Times, which ran a story in January 1998 based on an anonymous interview with McGeady attributing the phrase to Maritz.

Maritz answered: "Not to my knowledge." But he added that he was never named in the Times story and that, "for a long time, it wasn't clear who at Microsoft would have said that."

But the Times story clearly names Maritz, and Microsoft spokesman Mark Murray said later outside court that the company called and complained after the article was published.

Microsoft attorneys earlier confronted McGeady with his own notes about the disputed November 1995 meeting, which don't mention Maritz's alleged "air supply" comment. They also produced notes from two other Intel executives, who also didn't include it.

"The phrase was so far out of bounds with what I consider to be an acceptable business practice," McGeady testified. "It stuck out clearly in my mind."

Maritz, a group vice president at Microsoft, is among the most senior executive expected to testify at the trial. He is responsible for Microsoft's most important products, including its dominant Windows operating system and its profitable Office software programs.


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