Antitrust Rumor -Leaked Microsoft Memos
RE: "Microsoft's intentions in "building dependencies" between products has been to lock competitors out. ... Such practices directly contradict the letter of the Sherman Act, which prohibits a company from using a monopoly in one market to create new business in another. " W. G. Rohm article.
"MICROSOFT PLANNED TO SABOTAGE COMPETITORS
By Wendy Goldman Rohm
Red Herring Online
August 25, 1998
"We should surely crash the system ..."
These are the words which one Microsoft vice president, David Cole, wrote in a memo to other senior executives at Microsoft (MSFT) -- including Senior Vice President Brad Silverberg -- about how to sabotage a competing operating system, DR DOS.
Mr. Cole's memo is just part of the evidence the Justice Department has collected under subpoena in its effort to prove that Microsoft's business practices are monopolistic and predatory. This evidence has never been made public before. Sources include those who distributed the messages, Microsoft insiders, and government sources.
The confidential messages were written by Microsoft employees between September 1991 and February 1992, as Microsoft was shipping the "Christmas beta" of Windows 3.1, which included code that could detect what Mr. Cole's memo called "alien operating systems," like DR DOS, an MS-DOS competitor produced by Digital Research. If Windows 3.1 was not running on MS-DOS, it would show users fake error messages.
On a treadmill
At the time, Microsoft officials defended the warnings as innocuous, and designed to help users. Microsoft removed the warning from the final version of Windows 3.1 -- but only after it had shipped thousands of copies of the beta, creating the impression that DR DOS could not run with Windows without potential errors, something corporate computer managers dreaded.
But Mr. Cole considered going well beyond using the detection feature to give users questionable warnings. In the documents, he suggested making Windows 3.1 malfunction if it detected DR DOS. Mr. Cole wrote, "Maybe there are several very sophisticated checks so competitors get put on a treadmill."
Mr. Cole, Mr. Silverberg, and Microsoft senior engineers went on to discuss how they would conceal the sabotaging code from the press and hide these efforts from the public at large -- and, in particular, from customers who might flood Microsoft's support lines when problems arose running their software. The plan was to blame the problems on the Digital Research operating system.
The emails also show that executives planned for Microsoft's legal department to further confuse consumers. Microsoft lawyers were to draw up language that would appear on the screen to obfuscate why the competing software wouldn't work. The Cole memo went on, "the less people know about exactly what gets done, the better."
In February 1992, Senior Vice President Brad Silverberg responded to Mr. Cole and others. In the ongoing discussion of how to prevent rival products from running well with Windows, he wrote, "The most sensible thing from the development standpoint is to continue to build dependencies on MS-DOS into Windows."
That last sentence is a critical one, and goes to the heart of the Justice department's current antitrust suit against Microsoft. It suggests that, going back to the early part of the decade, Microsoft's intentions in "building dependencies" between products has been to lock competitors out.
It depends
Later, Microsoft executives would build dependencies on Windows into Internet Explorer -- so that, the Justice Department alleges, it could leverage its Windows monopoly to gain a dominant position with IE. RealNetworks (RNWK) CEO Rob Glaser leveled similar charges against Microsoft in recent hearings before Congress. Such practices directly contradict the letter of the Sherman Act, which prohibits a company from using a monopoly in one market to create new business in another.
Microsoft's legal team, for its part, denies that the memos are proof of anticompetitive practices. In filings responding to the Justice suit, Microsoft stated that later, similar memos the feds have cited were irrelevant because they were created by low-level staffers who had no real role in the company's strategies. But can vice presidents like David Cole and Brad Silverberg reasonably be described as low-level staffers?
Asked to comment about the secret memos, Mark Murray, a Microsoft spokesman said, "It's unfortunate that these kinds of tired, old accusations are being made again, seven years after the fact. All of these allegations were investigated fully by the [Federal Trade Commission] and the DOJ in the early 1990s, and both agencies found these accusations groundless."
Mr. Murray's interpretation of the events of late 1991 and early 1992 is kinder: "A beta version of Windows 3.1 determined whether Win 3.1 was running on a version of DOS that had been tested or not. Microsoft's goal was to reduce product support costs by informing consumers when they were running Windows 3.1 on an untested version of DOS. In the end, even that limited function was disabled when Windows 3.1 was released to consumers. Consumers running Windows 3.1 on DR DOS never received any error message further down.
The email exchange quoted above is one of many such memos which the government has collected as evidence; this publication will reveal more in coming weeks.
The question which the federal courts must decide is whether the memos merely represent tough talk -- a kind of businessman's braggadocio -- or whether Microsoft acted on its secret plans, with real anticompetitive consequences.
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, 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."
Its just a shame what some people are inclined to believe about the two Bills.
Several days old. You've all probably talked this one to death. Sorry if posted already.
Hal |
