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  Microsoft Witness Questions Penalty
Time: 02:41 EST/07:41 GMT | News Source: Associated Press | Posted By: Alex Harris

Tough antitrust penalties sought by nine states against Microsoft Corp. would hurt consumers and encourage other companies to use federal antitrust law as a substitute for their own research and development, an economist said Wednesday. Testifying as an expert witness for Microsoft, University of Virginia professor Kenneth G. Elzinga said the remedies proposed by the states would raise consumer prices and stifle innovation by Microsoft and other high technology companies.

If Microsoft is required to disclose technical information about its Windows operating system, as the states propose, Elzinga said it would result in "a dampening of incentive" for companies to do their own research and development. "Forcing any firm to share its intellectual property with rivals reduces incentives to innovate in the future," he said.

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