Microsoft: AOL-Netscape Merger Negates Government Case



WASHINGTON, D.C--The blockbuster America Online Inc. buyout of Netscape Communications Corp. cuts the legs out from under the government's antitrust action against Microsoft Corp., the software giant's attorneys said Tuesday.

Speaking outside the U.S. District Court, Microsoft spokesman Mark Murray dubbed the proposed $4.2 billion acquisition of Netscape by online giant AOL "a seismic event in this industry and in this case."

William Neukom, Microsoft vice president of legal affairs, concurred: "This deal creates a new day for consumers of operating system technology generally and of Web browsing technology, of Web porting technology, of Internet service technology and last but not least E-commerce technology."

Lead government attorney David Boies begged to differ, saying Microsoft's dominance left Netscape little choice but to be acquired. Microsoft, he noted, "forced Netscape out of the ranks of independent companies. What you see here is an exit strategy for Netscape," he said.

Boies said he did not think the deal would have a significant effect on the landmark antitrust case either in the liability or remedy stage. While it is premature to talk about remedies, Boies said he did not think any remedy should be "Netscape-centric."

Neukom reiterated his call for the government to drop the case. It should "stop wasting public resources and taxpayer dollars," Neukom said. "We saw in the '70s and into the '80s that technology moves faster than the legal system. The market does a better job protecting consumers than the government can," Neukom said.

Meanwhile, inside the courtroom, Microsoft attorney Michael Lacovara continued to question economist Frederick Warren-Boulton, a government witness, on his qualifications to talk about the software market.

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