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Internet browsers and operating systems, Netscape and Microsoft, Java and QuickTime were the focus of a heated debate Monday night between two key witnesses in the government's suit against Microsoft. Sponsored by Wharton's Gruss Public Management Program, the debate, entitled, "U.S. v. Microsoft: Evaluating the Economic Arguments," drew more than 200 students and professors into a packed room inside Steinberg-Dietrich Hall. Daniel Rubinfeld, a Law professor at the University of California at Berkeley, faced off against Richard Schmalensee, the dean of the Sloan School of Management at the Massachusetts Institute of Technology. The two economic and technology experts debated several key issues of the trial's most recent findings. While he blasted Microsoft last week, U.S. District Court Judge Penfield Jackson has yet to release a final decision in the case. At issue was whether Microsoft violated the federal Sherman Antitrust Act in tying its Internet Explorer web browser to its Windows 95 and, later, Windows 98 operating systems. The government, Rubinfeld explained, maintains that Microsoft took anti-competitive actions in the distribution of its web browser in order to maintain its monopoly over the operating system market. "This debate is not only significant in terms of policy, but in the legal proceedings as well," said Rubinfeld, who was in charge of the government's economic case against Microsoft. Rubinfeld, who was also the deputy assistant attorney general for antitrust from July 1997 to December 1998, identified three basic harms caused by Microsoft's actions. Specifically, Rubinfeld argued that Microsoft's virtual domination of the market has led to "fewer choices for consumers," a lag in innovation and "unjustifiably distorted competition." Schmalensee, who followed Rubinfeld in his presentation, contended that while "Microsoft is not a cuddly company," it certainly did not violate any laws in attempting to ensure its survival in the market. "Is it illegal to improve a product to maintain a monopoly?" he asked. "I think that is where the government is going, and I think that that is bad policy." Schmalensee, who was Microsoft's lead economic witness, concluded that, "Windows' 'monopoly' is far from obvious," and argued that, "consumers benefitted substantially" from Microsoft's offering of Internet Explorer. In their rebuttals, each commented on the role that the government plays in today's expanding technology market. "Don't underestimate the benefit to competition by having someone to watch over the market," Rubinfeld said. This debate will continue long after the speakers have returned home. Once Jackson releases his rule in 30 to 60 days, the losing side will likely appeal, meaning that there won't be a final decision for several years, Rubinfeld said. Wharton sophomore Chris Burton said he sided with Schmalensee's presentation on behalf of Microsoft. "He seemed pretty successful in trying to portray the media in taking a role that swayed public opinion in the case," Burton said. And Betsy Bailey, chairwoman of Wharton's Public Policy and Management Department, who introduced the speakers, said she thought that the debate brought forward a "highly relevant topic."

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