Microsoft's chief economic witness remained the centre of attention as the Department of Justice argued that the integration of Internet Explorer into Windows 98 was illegal and would harm consumers in the long run.
David Boies, lead government attorney, continued to question Richard Schmalensee, dean of the business school at the Massachusetts Institute of Technology, who claimed that Internet Explorer was integral to the Windows operating system because it was integrated seamlessly and was not a separate application.
However, Schmalensee admitted that Microsoft knew its decision to bundle the two products would make life difficult for rival Netscape. He also claimed the decision to bundle the two products was made before Netscape was a significant company - Microsoft revealed the decision in December 1995, but insisted it had been made much earlier.
Schmalensee refuted claims that Microsoft has a monopoly, arguing that if it were in such a position, it could charge up to $2,000 for each copy of Windows 98 instead of the usual $50.
He added that the barriers to entering the operating system market are low enough to allow rival developers to challenge Windows quickly. The claim was made to counter a key allegation in the government's case - that Microsoft has moved anti-competitively to dominate the internet software market and secure greater profit in the future as online commerce grows.
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