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To: Bearded One who wrote (22588)	2/6/1999 2:11:00 AM
From: Gerald R. Lampton	Respond to of 24154

Lo and behold, Windows 98 has a built in browser and set of APIs and DLLs. Furthermore, Windows 98 has an icon which can't be removed that starts up the browser. Could this be seen as a predatory, anticompetitive, or otherwise illegal act? Morally, I would think so. They don't need to make the icon unremovable. But what about legally? Off the top of my head, I would say that this constitutes "technological tying," using improved features in a product to kill off competitors. The courts try to stay away from regulating this kind of behavior in the free market. Now, regulated industries like the phone company are a different story. The government's theory seems to be that Windows 98 really is nothing more than Windows 95 and IE 4 "welded" together. So, what do you have to do to separate Windows 98 into its components, IE 4 and Windows 95? Boies seems to want to say that all you have to do to eliminate IE 4 from the hard drive is "turn it off." He was quoted today saying that the Felton program can do that, albeit it has bugs. One of the bugs, in my view, is that it removes files used by Windows. Microsoft seems to think that this fact proves that Windows and IE are "integrated" within the meaning of the DC Circuit opinion. In my view, it shows nothing of the sort. All it shows is that IE 4 relies on DLLs and APIs also needed by Windows and which therefore should be part of Windows. It does not show that the whole of Windows 98 is greater than the sum of Windows 95 + IE. It does not, in my view, meet the test laid out in the DC Circuit Consent Decree opinion. Now, Boies may well be right. If IE does rely only on DLLs and APIs also needed by Windows, given Allchin;s testimony, Microsoft will not be able to show that they are "integrated" because you derive no benefit from the integration through the user interface. In that case, you could "turn off" IE simply by removing the user interface, and, since the remaining files would all be needed by, and therefore a part of, Windows, the two products would be separated. However, the government has not yet proven this. I strongly suspect that the definition of the IE "product" will be a factual issue for the District Judge to decide, which is very bad for Microsoft. However, the DC Circuit Consent Decree does establish, in my view, some limits to the judge's discretion in this regard. Specifically, there is the footnote that says Microsoft cannot deliberately rig Windows so that it crashes if IE is removed. I think that language suggests that the DC judges have something more in mind than simply "turning off" the user interface of a product in order to remove it, since, if turning off Windows was all that was necessary to remove it, crashing Windows (i.e., making it not work, or turning it off) would be the same as removing it, and the footnote would be superfluous. In other words, crashing Windows by removing IE would be the same in legal terms as simply removing all of Windows. The footnote makes it clear, I think, that those two things are not the same. Of course, all of this is premised on the assumption that the lower court is constrained to follow the Court of Appeal Consent Decree case in deciding whether the tie between IE and Windows in Windows 98 is legal. I suspect Boies will argue that the District Judge is not so constrained.

To: Bearded One who wrote (22588)	2/6/1999 2:47:00 AM
From: Gerald R. Lampton	Read Replies (1) \| Respond to of 24154

I have reviewed Boies' cross-examination of Devlin and Devlin's affidavit. Based on those two documents, I do not believe the government has satisfied its burden of refuting Microsoft's articulation of the benefits of the integrated OS/IE product as set forth in Devlin's testimony. With the twin caveats that the trial judge may not even follow the DC Circuit Consent Decree opinion and that this is only my opinion, which he also probably will not follow, let me explain why: 1. Microsoft has articulated a plausible benefit from the combined IE/OS product which users cannot obtain on their own, the guarantee that every copy of Windows/IE will contain the same DLLs. The benefits of that can be inferred from the following testimony: 6 Q. EXACTLY. HOW DO YOU DETERMINE WHAT PRODUCTS YOU WILL 7 ACTUALLY RESHIP THE DLL'S WITH AND WHAT PRODUCTS YOU WILL 8 SAY TO YOUR CUSTOMER, "YOU'VE GOT TO HAVE THESE DLL'S"? 9 A. YES. OUR PREFERENCE -- AND I BELIEVE THIS IS TRUE OF 10 VIRTUALLY -- THE VAST MAJORITY OF INDEPENDENT SOFTWARE 11 VENDORS -- OUR PREFERENCE IS TO ONLY BE SHIPPING OUR PRODUCT 12 BECAUSE THERE'S HIGHEST COSTS IN A NUMBER OF DIFFERENT 13 DIMENSIONS IF WE HAVE TO SHIP ADDITIONAL SOFTWARE. 14 SO THE FIRST DEFAULT IS OUR PREFERENCE IS TO HAVE 15 THOSE DLL'S BE AVAILABLE AS PART OF THE PLATFORM THAT WE'RE 16 SHIPPING ON. HOWEVER, IN THOSE CASES WHERE WE MAY DEPEND -- 17 AND WE TYPICALLY FIND THIS OUT IN WHAT'S CALLED BETA TESTING 18 WHERE YOU SHIP AN EARLY VERSION OF YOUR PRODUCT TO THE 19 CUSTOMER -- WE MAY DISCOVER THAT OUR PRODUCT, IN TERMS OF 20 WHICH VERSIONS OF SOME OF THE DLL'S IT DEPENDS ON VERSUS 21 WHAT'S COMMONLY OUT THERE AT THIS POINT IN THE MARKETPLACE, 22 IS SUCH THAT THERE MAY BE DEFECTS IN THE PRODUCT IF A 23 PARTICULAR VERSION OF THE DLL IS NOT AVAILABLE ON THE 24 CUSTOMER'S MACHINE. 25 IN THAT CASE, WE WILL REDISTRIBUTE THOSE DLL'S 18 1 WHICH WORKS FOR PROBABLY THE MAJORITY OF OUR CUSTOMERS. 2 THERE ARE CUSTOMERS, PARTICULARLY CORPORATE I.T. SHOPS, THAT 3 WON'T ALLOW A COMPANY LIKE RATIONAL TO INSTALL WINDOWS DLL'S 4 ON THEIR PARTICULAR MACHINES. SO THAT CREATES A PROBLEM AND 5 OUR TECHNICAL SUPPORT PEOPLE THEN DEAL WITH THAT. 6 Q. AND THE REASON THEY WON'T PERMIT A COMPANY LIKE RATIONAL 7 TO INSTALL WINDOWS DLL'S IS THEY WANT TO CONTROL THE 8 INSTALLATION OF THOSE DLL'S? 9 A. CORRECT. WELL, THEY TYPICALLY HAVE A PLATFORM THAT THEY 10 KNOW WORKS AND THEY DON'T TYPICALLY ALLOW COMPANIES LIKE 11 RATIONAL TO CHANGE THAT. * * * 12 Q. AND THEY COULD UPGRADE, AS YOU PUT IT, EITHER BY 13 THEMSELVES UPGRADING, OR BY YOU, ASSUMING THEY ARE WILLING 14 TO PERMIT YOU TO DO THIS, SHIPPING THE DLL'S WITH YOUR 15 PRODUCT TO UPGRADE FOR THEM? 16 A. RIGHT. WE HAVE PRODUCTS, FOR EXAMPLE, THAT RUN BOTH ON 17 WINDOWS 95 AND WINDOWS 98. THERE'S DIFFERENT CAPABILITIES 18 IN THOSE, AND IF THE CUSTOMER UPGRADES TO WINDOWS 98, THEN 19 THE NEW FEATURES WOULD APPEAR. 20 WE TRY -- I MEAN, FOR EXAMPLE, WE DON'T WANT TO 21 OURSELVES REDISTRIBUTE WINDOWS 98. AS I SAID EARLIER, WE'D 22 PREFER TO NOT -- WE'D PREFER TO JUST MAKE OUR PRODUCT WORK 23 ON BOTH PLATFORMS, WHICH IS HARD ENOUGH ITSELF. And the following testimony shows that developers perceive the Windows/IE set of DLLs as an integrated whole, rather than as separate products: 19 AND THEY QUITE OFTEN, FROM MY EVIDENCE, DIDN'T 20 KNOW WHETHER IT WAS A COMPONENT OF IE. IT'S, TO THEM, JUST 21 A COMPONENT OF THE PLATFORM THAT THEY'RE BUILDING ON. SO 22 THAT WAS MORE THE WAY THE DECISION WAS MADE BY THE 23 INDIVIDUAL PRODUCT MANAGERS AS OPPOSED TO SAYING IE ITSELF 24 WAS THE DRIVING FACTOR. Devlin's testimony does not prove that IE and Windows are integrated in the sense that I have described it because it does not show that, among the APIs and SLLs which constitute part of the integrated whole platform, some are needed by IE and not by Windows. 2. The burden of production, and the ultimate burden of proof, therefore arguably shift to the government to demonstrate by a preponderance of the evidence that Microsoft claim of a plausible benefit is untrue (as Boies did so effectively with Allchin) and is really just a pretext for anticompetitive conduct. Boies tried to undermine the showing in his cross examination by showing that Microsoft is constantly changing its DLLs, so that Devlin still has to ship the DLLs his product uses, but it is at least arguable that he has not succeeded. Certainly, there is no showing that Microsoft's changes in DLLs frustrate the cost savings Devlin derives from being able to write to a unified set of IE/Windows DLLs that he knows will be on all users' machines. Even if Boies has made such a showing to some extent, ass he has shown is that the benefit is not as great as Microsoft claims; the benefit can still be considered "plausible" (i.e., arguable). So, it will be up to the judge to decide, but I do not think Boies has demonstrated the pretexual nature of this claimed benefit. To show the claimed benefit is pretextual, he would have to show that the benefit of having the unified set of DLLs on all machines is no greater if Microsoft combines the products than if users are allowed to do so (or not do so) on their own. 3. Because of the government's failure of proof, arguably, Microsoft wins on the Browser integration claims.