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. Last Updated: 07/27/2016

Judge: AOL Deal 'Significant'




WASHINGTON -- In the final session this year of the Microsoft antitrust trial, the judge acknowledged that the pending $4 billion purchase of Netscape by America Online "might be a very significant change of the playing field."


U.S. District Judge Thomas Penfield Jackson agreed Wednesday to allow Microsoft to review paperwork that Netscape and AOL submitted to the Justice Department last week seeking approval of their deal.


Saying the purchase of Netscape "could very well have an immediate effect on the market," Jackson said he might also permit Microsoft to ask the companies for additional confidential documents to help defend itself against the government's antitrust charges.


AOL spokesman Jim Whitney would not say whether the company will fight Microsoft's efforts to review its merger documents.


The trial resumes Jan. 4.


The judge also agreed to accept into evidence, all at once, portions of the videotaped testimony of Microsoft chairman Bill Gates and other industry executives.


The government had been playing the video excerpts occasionally in court, part of the reason for the trial's length. The case initially was expected to last four to six weeks but already is nine weeks long and is not half over.


Jackson additionally said he might agree to allow lawyers for the 19 states suing Microsoft, in addition to those of the Justice Department, to question some of the company's planned witnesses.


To speed the trial, the judge had earlier imposed a rule limiting the governments to use just one lawyer to question each witness. Jackson said he will consider case-by-case whether to allow two government lawyers to question each Microsoft executive.


Microsoft lawyer John Warden described the judge's ruling on the AOL-Netscape documents as "a constructive first step."


But Warden also cautioned that the judge revealed "nothing of his view of the meaning of the transaction, only that he recognized the obvious fact that it's of some consequence."


As part of its antitrust case, the government contends that Microsoft used predatory business tactics to try to "crush" Netscape, whose Internet software once dominated Microsoft's but now commands less than half the market.


Microsoft argues that Netscape's purchase by AOL, the world's largest Internet provider, will rejuvenate the market because AOL can distribute Netscape's browser to all its subscribers, dramatically boosting its popularity.


AOL includes a version of Microsoft's browser, which is the software used to view information on the Internet. When the purchase was announced last month, AOL chairman Steve Case indicated he will continue to distribute Microsoft's browser.


Microsoft chairman Gates recently sent e-mails to his executives that he expects AOL to distribute Netscape's software "sooner or later to all its online service customers."


AOL's pledge to continue distributing Microsoft's browser "may well not accord with what one can establish otherwise," Warden said outside court.