Nailed by Its Own E-Mail?
Microsoft is going to have to reveal documents that may show Windows and Internet Explorer can exist separately
Business Week Online
Justice is going to prove Microsoft's integration of Windows and Internet Explorer is illegal? Fat chance, said most
observers, even Justice's supporters. After all, only a month after Justice filed its suit last May, a circuit court in a related
case noted that browser integration would be acceptable if it yielded an improvement in performance that consumers
couldn't achieve on their own. The panel said Microsoft seemed to have shown there were "benefits to its integrated
design as compared to an operating system combined with a stand-alone browser such as Netscape's Navigator."
But in the past few months, Justice has been scoring points on this issue. Several government witnesses have testified that
the same benefits can be achieved by letting personal-computer makers bundle another browser into the operating system.
And a raft of E-mail from top Microsoft executives indicates that the company embedded the browser into the operating
system with the intention of beating rival Netscape Communications Corp. -- and not because the company sought to
offer new benefits to consumers.
On Jan. 28, Microsoft received the biggest blow yet in its once-solid defense that its browser and operating system are
one product that cannot be considered an illegal tie under antitrust law. U.S. District Judge Thomas Penfield Jackson
ordered the company to release internal documents -- an E-mail and spreadsheet -- that appear to show it could be
possible to separate Windows code from the browsing code. Microsoft had argued that these documents were protected
under the rules of attorney-client privilege.
BAD FOR THE DEFENSE. Microsoft has steadfastly claimed that its browser is so tightly woven into Windows 98
that it cannot be removed without degrading the operating system. But in an Oct. 21 E-mail, Microsoft employee David
D'Souza wrote that within a Windows 98 file, he was able to separate particular functions that were used only for
browsing the Internet from other functions used only for Windows. Some of the functions were for shared purposes. He
noted that "this might not be useful" to Microsoft's defense.
D'Souza's analysis followed earlier testimony by government witness Edward W. Felten of Princeton University, who said
he had developed software that removed browser code without harming the operating system. He also noted that there
was no technological reason why Microsoft had to mix code for Windows and browsers into shared files. In written
testimony submitted on Jan. 28, senior Microsoft executive James Allchin wrote that Felten's software merely hid
Web-browsing functionality from view rather than remove it. Allchin takes the witness stand on Feb. 1, and Justice's lead
litigator, David Boies, says he intends to question the exec about D'Souza's documents.
Boies also is sure to question Allchin about a series of E-mail indicating that Microsoft may have decided to integrate its
browser into Windows as a way to harm Netscape. In a January, 1997, E-mail, Allchin wrote: "I am conviced we have to
use Windows -- this is the one thing they [Netscape] don't have.... We have to be competitive with features, but we need
something more -- Windows integration. If you agree that Windows is a huge asset, then it follows quickly that we are not
investing sufficiently in finding ways to tie IE [Internet Explorer] and Windows together."
Sure, Microsoft appears to be pursuing a couple of different agendas here. But when there's mixed motive under antitrust
law, a court can decide which motive dominates. In this case, Jackson can decide that while Microsoft may have sought
benefits by integrating, its predominant motive was to hurt competition. The government is trying to convince Jackson
that, even if there were some technological benefit to integration, that benefit can be achieved in other ways and that
Microsoft's primary intention was to harm Netscape.
PRESSED WITNESS. Jackson was clearly struggling with that balancing act on Jan. 26 when Microsoft executive Paul
Maritz was on the stand. Justice offered up a few internal Microsoft E-mails that showed some company officials were
proposing that a few pieces of the browser be removed and sold separately as part of the Windows 98 upgrade.
Responding to these proposals, Maritz noted in a July, 1997, E-mail, "It's tempting, but we have to remember that getting
browser share up to 50% (or more) is still the major goal."
Judge Jackson pressed Maritz on the reasons why he preferred to keep the browser intact. "You wanted it to ship as an
integrated product," the judge noted, and the "the primary objective of doing it was to increase browser share."
Justice also has submitted depositions from PC makers who said they would prefer a choice of browsers. Many of their
customers, they say, prefer Netscape, and others prefer that their operating system not include a browser at all. Justice is
trying to prove that there was a separate market for browsers. If the government can meet this test, it has gone a long way
toward proving that the integration was an illegal tie of two products -- and not a single product, as Microsoft claims. |
