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Heads Up Dec 3, 1997

Business as Usual
It comes as no surprise that Microsoft has criticized the Department of Justice for making public a number of documents related to its civil antitrust suit. Those documents include sworn testimony from company representatives of Packard-Bell, Gateway 2000, IBM and Compaq which describe how business gets done with Microsoft. In more than one instance, Microsoft is said to have dictated to OEMs what software could be preinstalled on personal computers, or risk losing licensing agreements for its Windows operating system.

Stephen Decker, director of software procurement at Compaq Computer Corporation, described a situation in which Compaq wanted to remove the Internet Explorer icon from the desktop. He is quoted in court documents as saying, "At the time we had a relationship with Netscape and we had been shipping their product for awhile. And therefore Netscape was actually the browser partner and we wanted to give that position on the Compaq Presario... Well, when they [Microsoft] found out about it, they sent a letter to us telling us that, you know, they would terminate our [licensee] agreement for doing so."

At Gateway 2000, Joseph Von Holle, director of software and the global products explained that "...Microsoft requires that we boot to what they call a Pristine Windows environment, and that is an environment that Microsoft defines. And users may change that configuration, but we're not able to as a manufacturer."

Microsoft's business practices have been under the scrutiny of the DOJ before. In a Competitive Impact Statement dated July 27, 1994, the Justice Department said, "The Complaint seeks to prevent Microsoft from continuing or renewing any of the anticompetitive practices alleged to violate the Sherman Act, and thus to provide fair opportunities to other firms to compete in the market for PC operating systems."

The bottom line is this: the many innovative software products developed by Microsoft are not what's in dispute. At issue is the way the company does business, denying competing products, like Netscape, from "front page" treatment on the desktop. If Microsoft is allowed to continue pressuring its resellers in a way that eliminates competition in the marketplace, they just may succeed in giving "business as usual" an entirely new meaning.

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