Jonathan Schwartz, a Sun senior vice president, said a court should impose the antitrust penalties requested by nine states to ensure Microsoft does not use its Windows OS to shut out new services.
Sun, Microsoft and several other companies are developing Web services that would allow customers to access programs, messages, targeted sales pitches and other data from any Internet-connected device, such as a cell phone, an interactive television box or a PC.
Schwartz said Microsoft's identity-authentication technology, known as Passport, places Microsoft as a middleman between e-commerce sites and their customers. Microsoft could start charging for the technology or hold customers' personal information hostage, he said.
"I believe that Passport is, in fact, an intermediary and a threat," Schwartz said.
Users of Microsoft's newest Windows XP operating system are constantly reminded to create a Passport account. One is required for Microsoft's Internet service, portions of its Web sites and its instant messaging product.
Schwartz is Sun's top representative on the Liberty Alliance, a group started by Sun to create open technology standards for identity authentication on the Internet. The group includes companies like the Bank of America, General Motors and American Airlines.
Microsoft lawyer Steven Holley accused Schwartz of deriding Passport and misstating Microsoft's intentions in order to scare other companies into joining Liberty.
Holley said Liberty's name is "an insult, because it means liberty from Microsoft hegemony."
"With all due respect, I think that's a little paranoid," Schwartz replied.
Microsoft asked Judge Kollar-Kotelly to throw out much of Schwartz's testimony about Web services, as those products -- which are in their infancy now -- were not mentioned explicitly in the first phase of the case.
Kollar-Kotelly postponed a decision. She said she was skeptical of Microsoft's argument that Schwartz's testimony didn't rise to an allegation of new antitrust violations but at the same time consisted of allegations that could not be addressed in the penalty hearing.
"I will note that Microsoft sounds a little schizophrenic," she said.
Kollar-Kotelly has not thrown out any testimony about new devices or technology, to the frustration of Microsoft lawyers. Microsoft wants to confine the case to the consumer desktop computer market.
Microsoft's Holley presented a Sun document sent to Justice Department antitrust chief Charles James that recommended many penalties that were later mirrored in the states' proposed remedies. The suggestions, which included the modular Windows provision and enforcement requirements, were rejected by James.
"So Mr. James apparently didn't think it was a very good idea," Holley said.
"Or Microsoft didn't, yes," Schwartz said.
Princeton University professor Andrew Appel began testifying for the states late Tuesday. Appel said that despite Microsoft's protests, Microsoft has the ability to create a modular version of Windows and that the federal settlement's disclosure requirement is not strong enough to help software developers.
States that rejected the government's settlement with Microsoft and are continuing to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.
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