EXCLUSIVE: MICROSOFT
WITNESS ADMITS TO
DESTRUCTION OF EVIDENCE
By Wendy Goldman Rohm
Red Herring Online
September 2, 1998
A key witness in the antitrust suit filed by Caldera
against Microsoft (MSFT) has admitted under oath
that documents were deleted from computers in a
Microsoft office during the federal investigation of
the software giant, sources close to the deposition
said.
The documents in question illustrated Microsoft's
predatory sales activities in its attempts to restrict
the success of Digital Research's DR DOS, a rival of
MS-DOS, sources said.
During their probes of Microsoft, Federal Trade
Commission and Justice Department attorneys had
long suspected that evidence might have been
withheld or deleted -- a charge which Microsoft has
consistently denied.
These revelations mark the first time that evidence
exists under oath that information was destroyed
while the company was under investigation. The
Justice Department has now begun its own
investigation into this matter, and has just begun
talks with this witness, sources confirm.
A further investigation would now be needed to
determine whether these activities resulted in
obstruction of justice in both the Caldera case and
the Justice Department's antitrust investigation,
said antitrust experts.
Microsoft ber alles
The former Microsoft employee, deposed under oath
last week, asserted that between 1991 and 1993,
documents were deleted from computers under
instructions by the head of Microsoft's OEM accounts
at the company's German headquarters in Munich.
Some of these documents mentioned alleged efforts
by Microsoft to squeeze competitor DR DOS out of
the operating system market in Germany.
Whether Microsoft used anticompetitive methods to
beat DR DOS, an alternative to Microsoft's operating
system, is at the heart of the antitrust suit filed
against the software giant by Caldera, a small
operating system vendor that now owns DR DOS.
"I can confirm we took the deposition of a former
Microsoft employee last week," said Steve Hill, an
attorney representing Caldera in its antitrust suit
against Microsoft. "We consider [this person] to be a
key witness in our case. We can't comment on
anything that went on in a deposition."
Kick 'em out
Eliminating Digital Research was important to
Microsoft's European business.
During the early 1990s, Vobis, Germany's largest
computer manufacturer, shipped all of its computers
with DR DOS. At one point, Microsoft vice president
Brad Chase sent an email to VP Jeff Lum expressing
Steve Ballmer's concerns about Vobis. Mr. Ballmer,
then a senior vice president, is now president of
Microsoft.
"Steve told me to eat, sleep, and drink Vobis, so I will
be on everyone to let me know what's going on with
this account," he wrote.
Like IBM in the United States, Vobis had enormous
influence in Europe. Other Microsoft memos
suggested that winning Vobis over to MS-DOS
would "lead other OEMs" to support Microsoft's
product. In January 1991, VP Jeff Lum was urging
Joachim Kempin, Microsoft's vice president of OEM
sales, to "kick DRI [Digital Research, then the maker
of DR DOS] out" of Vobis.
Among memos the Justice Department has in its
possession is one Mr. Kempin had written as early as
October 1990, when Microsoft was plotting to use
per-processor licenses to lock out Microsoft
competitors. (In 1995, Microsoft signed a consent
decree with the Justice Department agreeing not to
use such contracts, which charged PC vendors
seeking to license MS-DOS and Windows a fee for
every computer sold, whether or not a Microsoft
operating system was installed on a computer.) The
memo reads, in part, "This will block out DR [Digital
Research] once signed."
The material now being collected in the two court
cases against Microsoft -- Caldera's antitrust suit,
and Sun's contractual dispute over Microsoft's
license to the Java programming language -- is
fueling Justice Department's concerns that Microsoft
is withholding evidence in the government's case
against the software company.
Microsoft offered no comment in response to these
new charges. "We can't comment on anything that
may have occurred in a deposition," said Microsoft
spokesperson Mark Murray. Mr. Murray noted that
Microsoft has given Caldera "access to the entire
library" of documents produced to the Justice
Department.
Statutes of limitation do not apply to obstruction of
justice cases, sources said, and the Justice
Department's next step, if the witness's statements
are found to be substantial, could be to consider the
appointment of a grand jury to further probe the
charges.
The memos quoted above were among those
discovered by the author in the course of researching
her book, The Microsoft File: The Secret Case
Against Bill Gates, published by Random House in
September 1998. Ms. Rohm's articles have appeared
in The Boston Globe, The Chicago Tribune,
Financial Times, Wired, Information Week, and PC
Week, among others. Write to her at
wendy@compuserve.com.
See our earlier story on Microsoft.
Will Microsoft's case stand up against these new allegations? Tell
us.
|
