Joey and thread,
Below is a Bloomberg article on MSFT barring CPQ browser changes with a few more interesting details:
BN 10/22 Microsoft Barred Compaq Browser Changes, U.S. Says (Update2)
Microsoft Barred Compaq Browser Changes, U.S. Says (Update2)
(Adds comment from Compaq executive in paragraphs 8-9)
Washington, Oct. 22 (Bloomberg) -- Microsoft Corp.threatened to pull Compaq Computer Corp.'s license to use theWindows 95 operating system unless Compaq featured Microsoft's Internet browser on its computers, Justice Department documents show.
Two other major computer makers -- Gateway 2000 Inc. and Micron Electronics Inc. -- sought permission from Microsoft to change the way the Internet Explorer program was installed on their computers, but were turned down, according to documents supporting the government's latest antitrust complaint against Microsoft.
The documents flesh out details that the Justice Department outlined Monday in its federal court suit, charging that Microsoft violated a 1995 antitrust settlement by abusing its near-monopoly on computer operating systems to gain advantage in the bruising ''browser war'' against rival Netscape Communications Corp.
The government charges that the world's biggest personal computer software industry leader illegally requires computer makers to install its Internet Explorer browser software if they want access to Microsoft's dominant Windows 95 operating system.
Microsoft officials say their marketing practices for Internet Explorer are legal because the browser is part of the Windows 95 system, and not a separate, free-standing program. ''Customers expect Windows to run the same regardless of which PC they buy,'' Microsoft spokesman Greg Shaw said. ''We can't have different distributors offering different flavors of Windows.''
The government says licensing restrictions that require installation of Internet Explorer violate settlement terms that prohibit Microsoft from forcing manufacturers to take separate Microsoft programs as a condition for getting the ubiquitous Windows operating system.
Compaq's senior vice president John Rose said the computer company was drawn into the government's dispute with Microsoft when the Justice Department issued a subpoena seeking testimony. Compaq, he said, doesn't object to installing Internet Explorer on its computers.
''The key that we're focused on is what customers want,'' Rose said. ''The feedback we've gotten from customers is that they like and want Internet Explorer with Windows 95.''
A Micron spokeswoman said that company also has no complaints about its relationship with Microsoft. ''We have a great Microsoft partnership,'' Micron spokeswoman Denise Smith said.
Micron was ''very surprised'' that its licensing talks with
Microsoft had become an issue in the case, and said any questions
about installation of Internet Explorer were raised by ''low-
level'' employees and aren't ''even on the radar screen of our
senior executives.''
Gateway officials couldn't be reached for comment.
Microsoft shares fell 2 13/16 today, closing at 135 11/16.
Netscape shares fell 3 3/16 to 36 5/8. Compaq shares fell 1/16 to
73 13/16. Micron shares rose 1/8 to 16 15/16. Gateway shares fell
7/8 to 32 7/8.
Memorandum Filed
In Monday's lawsuit, the government said part of its case
would hinge on evidence that three unnamed computer manufacturers
were turned down when they asked Microsoft for permission to
either remove the Internet Explorer program from their products
altogether or to remove a computer ''icon'' that lets users
access the program from the Windows 95 desktop.
A memorandum filed in federal court, and supporting
depositions, affidavits, and corporate documents, identified
Compaq, Gateway and Micron as the three companies.
The material shows that Houston-based Compaq, one of the world's top PC manufacturers, tried to remove the Internet Explorer and Microsoft Network icons to give rival Netscape's browser a spot on the desktop of Compaq's Presario model PC. ''Well, when they found out about it, they sent a letter to us telling us . . . they would terminate our agreement for doing so,'' Stephen Decker, Compaq's director of software procurement, said in a statement released by the government.
The Compaq executive said the company was no longer considering Netscape's product as an alternative because ''the category of browser is now fulfilled with the Internet Explorer product.'' Compaq wants to avoid the additional fees and wasted hard-drive space that adding a second browser would require, he said.
In another statement given to antitrust investigators, Eric Browning, department manager for product enhancement at Micron Electronics Inc., said he asked ''whether Microsoft would permit Micron to remove Internet Explorer from Windows 95. Through telephone conversations, Microsoft denied this request.''
Gateway sought permission to remove the icon ''on several occasions,'' according to a company statement. Each time, Microsoft refused.
Microsoft spokesman Mark Murray said the company doesn't object to computer manufacturers putting other browsers in their machines. Microsoft, however, expects licensees to ship Windows as it was designed by Microsoft, he said.
Compaq ''was put on notice'' that its license would be terminated ''unless they stopped disabling part of the operating system,'' Murray said. ''They didn't have to do anything except install the program
the way it was manufactured,'' he said. ''Computer manufacturers
can't rip out parts of our product and ship some portion of our
product. When a computer manufacturer goes in and disables part
of our product, that violates our license.''
Separate products
The government's case against Microsoft is based on its argument that Internet Explorer is a separate product, and not an enhancement to the Windows system.
The browser war has drawn such attention because Microsoft, Netscape, and others are pursuing plans to use the browser as a way to access information on both the Internet and a personal computer itself -- supplanting many of the functions now performed by Microsoft's Windows program on the overwhelming majority of the world's PCs.
The government's memorandum says the case is important because browser technology is a ''serious threat to Microsoft's monopoly'' and that ''Microsoft recognizes this threat and is taking action to defeat it.''
To bolster its case, the government says Microsoft markets the Internet browser as a separate program, in versions that can be used with Windows 95 and other operating systems.
The government released information from a deposition by a Microsoft executive, Joachim Kempin, who said Internet Explorer is covered by the Windows license, and that manufacturers are required to install the browser in the way that Microsoft wants it to be featured. Kempin is a senior vice president in charge of Microsoft sales to computer manufacturers.
If the government convinces a federal judge that Windows 95 and Internet Explorer are separate products, antitrust lawyers say evidence that Microsoft threatened to take away Compaq's license for Windows would present serious problems for the software giant.
''If indeed Microsoft made these kinds of threats to computer manufacturers, I think that'll turn things in the Justice Department's favor,'' Washington antitrust lawyer Garret Rasmussen said.
Ibexx |
