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WASHINGTON--Sun Microsystems, which recently filed a lawsuit against Microsoft seeking more than $1 billion in damages, came to court Tuesday for the remedy phase of Microsoft's antitrust trial, warning that the software giant might use its Windows monopoly to dominate the emerging market of Web services.

Jonathan Schwartz, Sun's chief strategy officer, appearing as a witness for the nine nonsettling states, made claims similar to those Sun alleged in a lawsuit filed earlier this year, saying Microsoft threatens to transfer its Windows monopoly from the PC operating system to a new middleware layer on which Web services applications will be written.

Sun's fear is that Microsoft will use its Web services .Net initiative to capture a larger share of the server market. Sun's Web services platform, the Sun Open Net Environment, competes with Microsoft.

Beyond Case's Scope?

A key issue for Microsoft trial Judge Colleen Kollar-Kotelly to resolve is whether emerging areas, such as Web services, can be included in the broader remedy sought by the states that refused to sign the Bush administration-led settlement in favor of seeking tougher remedies.

Reading a part of last June's Court of Appeals ruling that cited a previous Supreme Court antitrust decision, she said "that drafting an antitrust decree by necessity 'involves predictions and assumptions concerning future economic and business events.'"

Microsoft attempted to strike testimony on Web services, arguing that it isn't covered under the monopoly maintenance violations cited by the appeals court. This isn't the first time Microsoft has attempted to block testimony about emerging markets, but the judge, while not officially ruling on that argument, allowed Schwartz to testify on the subject.

Schwartz is the 13th witness for the states in a remedy phase that is now in its fourth week and isn't expected to conclude until sometime in May.

Web services are a "substantial, viable threat to Windows," said Schwartz in his written testimony. If most applications are delivered as Web services, and developers write directly to a services platform, "instead of stand-alone PC applications, the applications barrier protecting Windows could be substantially eroded," he said.

Web services reside and run on servers that can be accessed with a variety of client devices. As a result, "consumers will not be required to purchase Microsoft's desktop operating system in order to run the applications they desire," said Schwartz.

Restrictions Sought

The Bush administration settlement, Schwartz argued, "does not restrict Microsoft's ability to impede competitive Web services and Web service platforms."

"Because Web services rely upon the ability of different applications to communicate with each other, common standards and protocols are essential to facilitate interoperability. If, however, a single firm dominates a critical node on the Internet, such as the desktop PC, it can effectively impede competing services or other devices from interoperating with the node it controls," said Schwartz.

In cross-examination that was still emerging Tuesday morning, Microsoft attorney Steven Holley was pursuing a line of questions intended to refute Sun's claim that Microsoft's Web services are a threat to Sun and that the company has declined to participate in standards work and interoperability testing for its own competitive reasons involving Sun's Java technology.

Responding to Schwartz's testimony, Microsoft spokesman Jim Desler said, "Sun claims Web services are somehow a threat to Microsoft, yet, as we will bring out in cross-examination, most would acknowledge Microsoft has been a clear leader in Web services and helped pioneer the concept. In contrast, Sun has downplayed the impact of Web services and has declined to participate in Web services standards work and interoperability testing. They continue to promote competitive approaches to Web services," he said in a statement.

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