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.
This marks the first time that testimony 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. |
