Microsoft on Trial: Fairness of poll questioned

NEWS
The chief economist for the defence in the Microsoft antitrust trial Thursday said he had no idea that an opinion poll cited in his written testimony was commissioned by company Chairman Bill Gates specifically to support his company's views in Senate testimony he gave last year. "It would help me IMMENSLY (sic) to have a survey showing that 90% of developers believe that putting the browser into the OS makes sense," Gates wrote in an e-mail tended in court Thursday. "I am sure we will get like 60% before we explain our plans. Once we explain our plans properly I think we will get more like 90%. Ideally we would have a survey like this done before I appear at the Senate on March 3rd." When pressed to repudiate his testimony regarding the survey, MIT economist Richard L. Schmalensee stood his ground. The survey, which he received via a colleague at National Economic Research Associates Inc., was fair in any case, he said. "Surveys are often made to provide evidence," he told Department of Justice lead attorney David Boies. "As I used it, it was not misleading." Schmalensee had cited the poll to back his claim that Microsoft's Web-browsing software has been good for consumers and industry alike. "In a recent survey of [software developers], 85 percent predicted that Microsoft's integration of Internet functions into Windows would help their company and 83 percent predicted it would help consumers," he wrote. But that same poll, e-mails presented in court Thursday showed, was worded in such a way that even market researchers within Microsoft questioned its fairness. The survey specifically asked software developers what they thought about efforts by the U.S. Department of Justice to force Microsoft to separate its browser from the rest of the operating system. "I wouldn't refer to it as unbiased, and I wouldn't refer to it as an opinion poll," Microsoft researcher Ann Redmond wrote in February 1998. Instead, she said, the survey was little more than developers' reaction to Microsoft's side of the argument when they heard it in isolation. Indeed, Redmond added, a separate poll of developers worded in a less leading fashion indicated 44 percent of them actually supported the Justice Department in its battle against Microsoft. Some 41 percent backed Microsoft, and 16 percent did not know. Of that same group, only 27 percent believed Microsoft's argument that its browser was an inextricable part of the Windows operating system. A total of 57 percent believed the DoJ's argument that the Internet Explorer browser was a separate application. "We weren't trying to get an unaided response," Microsoft executive Scott Fallon responded. "We want to make the distinct point that our rationale hasn't been fairly represented in 'conventional wisdom' but when it is presented, [software developers] understand it and agree with it." The revelation came at the end of a difficult day for Schmalensee. From the time he mounted the stand Thursday morning to the time he left, he had backed away from, or qualified statements in two of his previous papers, leaving the impression that he had at changed some of his thinking over the years. In a 1987 article for the Antitrust Law Journal, Schmalensee wrote the presence of a few small competitors to a dominant firm didn't mean there weren't significant barriers to entry for newcomers. Schmalensee, like other economists, insists no company can maintain monopoly power without first erecting some artificial "barrier to entry" that others cannot overcome. In earlier trial testimony, however, Schmalensee said small competitors to Microsoft's Windows operating system such as Apple Computer Inc. helped prove Microsoft was not a monopoly, even though its operating system is included on some 95 percent of all Intel-compatible PCs. Boies wanted to know whether Schmalensee had changed his mind since the article was written. Schmalensee replied he hadn't. For even though companies such as Apple Computer Inc. are comparatively small, he said, they are still large enough to be counted as real competitors and, perhaps some day, a threat to the dominance of Windows. The eminent economist was less tenuous in retracting his own statements from a 1982 Harvard Law Review article. He wrote then that when a company showed unusually high profits over a long period of time, it was clear evidence that that company could raise prices to artificially high levels while at the same time excluding competition. In some cases, that "market power" could include monopoly power like that Microsoft allegedly yields. Yet Schmalensee earlier denied high profits said anything at all about Microsoft's power over its rivals. Boies demanded an explanation. "What could I have been thinking?" Schmalensee said incredulously. That much, he said, he no longer agreed with. The government spent much of the afternoon sparring with Schmalensee over what Microsoft had promised would be a "rigorous, quantitative analysis" from its side. In written testimony presented last week, Schmalensee asserted that potential competition for the Windows platform had kept prices for Windows low. Among others, Schmalensee said Thursday, Netscape Communications Corp.'s Navigator browser, Sun Microsystems Inc.'s Java technology and IBM Corp.'s OS/2 operating system all posed potential threats to Microsoft's operating system. Boies asked Schmalensee to estimate the effect each of the technologies had had on the price of Windows. Schmalensee said he was sure they had all pushed prices down, but could give no estimate of the savings that resulted. Take me to the DoJ/Microsoft page.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

GHar123

I totally dislike pirating of works, I fear that artists will be deterred from creating works if they think that they are going to get ripped off....

27 minutes ago by GHar123 on ACTA stumbles in Germany
JCB33

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

6 hours ago by JCB33 on ACTA stumbles in Germany
Moley

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

8 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
greycynic

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

8 hours ago by greycynic on Ten flawed products that derail productivity
GrueMaster

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

10 hours ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint
Frederick Wrigley

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

11 hours ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint
bdantas

Excellent article. One small correction, though--although a fresh installation of Linux Mint 12 will, indeed, provide the user with a version of...

11 hours ago by bdantas on A tale of two distros: Ubuntu and Linux Mint
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

12 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

12 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Moley

For Gnome 2 die-hards, it is possible to add icons to the bottom panel (or top top panel, if you prefer) which provide the exact Gnome 2...

13 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
ramwellian

Your comments would seem pretty naive and immature. Your 'solution' appears to be, "gee, let's all just give in to the hackers and give them...

13 hours ago by ramwellian on Cloud computing security: no more oxymoron?
BugStalker

"Interesting thought ... If you installed Win7 as a dual boot on a machine that previously only had Linux, and it wrecked your Linux installation,...

13 hours ago by BugStalker on Windows 7 Declares War on GRUB
whs001

This is an excellent summary of Ubuntu and Mint and the interface differences between them. Most such articles take a very partisan position for...

13 hours ago by whs001 on A tale of two distros: Ubuntu and Linux Mint
Moley

@ewallace. Not so clear. Anyone can obtain the text, for example from here http://www.ustr.gov/webfm_send/2379. I support ACTA so long as it and...

13 hours ago by Moley on ACTA: Facts, misconceptions and questions
45283

I think WinRT is fantastic. I just wish it was an option for people that didn't want to go through Microsoft's App Store with its attendant...

17 hours ago by 45283 on Why Windows 8 needs architectural hygiene for WOA
Burn-IT

Nine people? £30m? Who's back pocket is that lot going in? And IF they say it is for new buildings, what about all the ones the government has...

18 hours ago by Burn-IT on Police set to launch three £30m e-crime hubs
ewallace

Just to be clear, nobody knows what is in the text of ACTA, here is a photograph of the text of ACTA http://twitpic.com/8h9iju as submitted to the...

18 hours ago by ewallace on ACTA: Facts, misconceptions and questions
fgvrg56

Unfortunately main issue is that ASUS is refusing to accept that they make some mistake on this version of asus Transformer prime. 1 - GPS sensor...

19 hours ago by fgvrg56 on Asus Eee Pad Transformer Prime Wi-Fi & GPS problems?
Ben Woods

@Marcus A fair question. Just talked with Archos which said it was working on an announcement for next week....

20 hours ago by Ben Woods on Archos confirms G9 Ice Cream Sandwich update schedule
Marcus Karlsson

Any update on this, considering the claimed "first week of February"?

21 hours ago by Marcus Karlsson via Facebook on Archos confirms G9 Ice Cream Sandwich update schedule