By Susan Garland
Aggrieved PC Makers Are Out of Sight, but Making Themselves Heard
In depositions, if not as witnesses, they're arming Justice with tales of Microsoft's strong-arm tactics
For months leading up to the Microsoft antitrust trial, Justice Dept. prosecutors tried to persuade personal-computer makers to take the stand against the software giant. There were no takers. After grousing among themselves for years about what they considered Microsoft's strong-arm tactics, PC makers saw little upside in publicly taking on their chief supplier.
But execs from many of the top personal computer companies were subpoenaed for depositions, and the government has placed their statements into evidence. In some cases, their videotaped depositions have been shown in court and the taped testimony has played a key role in buttressing government charges that Microsoft used hardball tactics with customers to promote its Internet Explorer browser.
The only computer manufacturing executive to testify in person at the trial was John Rose of Compaq Computer -- and he took the stand as a Microsoft witness. But he may have inadvertently helped Justice more than he did the defense.
ILLEGAL TIE? One common complaint among PC makers was that Microsoft refused to allow them to remove the Internet Explorer icon from the desktop. Such statements bolstered Justice's accusations that Microsoft illegally tied the browser to Windows. An illegal tie is when a company with monopoly power requires a customer to take a second product as a condition of taking the monopoly product, in this case Windows. But Microsoft argues that it has the right to sell its product as it wants, and customers expect a certain uniformity from the "Windows experience."
James von Holle, an executive from Gateway 2000, testified in a deposition that in early 1997, Microsoft refused Gateway's request to allow it to remove the Internet Explorer icon from Windows 95 even if a Gateway customer had chosen an alternative browser. Von Holle testified that his studies indicated "that the less cluttered the desktop is ... the less confusing it is for the customer to use the product." He said that if corporate customers had their systems set up for Netscape, they would be confused if they accidently hit the Internet Explorer button. Justice officials argue that such requirements hurt consumers.
Microsoft has repeatedly argued in its defense that while it required PC makers to sell its desktop intact, it never prohibited manufacturers from including a rival browser sold by Netscape Communications Corp. Von Holle said no one in Microsoft ever asked Gateway not to include the Netscape browser on the deskop. But Von Holle said Microsoft complained about Gateway's use of Netscape's Navigator on its internal intranet system and that Microsoft threatened to charge the PC maker a royalty for each copy of Microsoft product used internally, despite a verbal agreement that it wouldn't.
A central charge by Justice is that Microsoft integrated its browser into Windows 98 to discourage PC makers from using Netscape's Navigator. Microsoft insists that Netscape is available to anyone who wants it, and that PC makers are free to use any browser they want.
MUTUAL BENEFITS. But Jon Kies, an executive from Packard Bell NEC, noted in a deposition that if Internet Explorer is already preinstalled into the operating system, it "wouldn't make sense to have two very large programs installed using up the hard disk drive." For corporate customers who have chosen Netscape's browser, having the second browser -- Internet Explorer -- on the desktop would increase training costs.
Compaq's Rose testified that his company's relationship with Microsoft was mutually beneficial, and that Windows 98, with its integrated browser, makes it easier for consumers to navigate the Internet. But Justice attorney David Boies introduced documents and sworn depositions indicating that Compaq feared Microsoft would retaliate against it if it didn't comply with the software giant's demands. The evidence seemed to show that Compaq was so scared of Microsoft's power that it decided to abandon products it preferred, such as Netscape's Navigator, in favor of Microsoft's products.
Coming up on the witness stand soon will be Joachim Kempin, the Microsoft executive in charge of relations with computer makers. But he will have a lot to answer for: Such powerful evidence from the personal computer community helps Justice show that, while some of its important witnesses decided not to show their faces in court, they weren't missing in action.
Garland has been covering the Microsoft trial in Washington from its beginning