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September 17, 1998

DID MICROSOFT TWIST AOL’S ARM?

By CBR Staff Writer

Head of America Online Inc Steve Case has handed fresh ammunition to government attorneys pressing an antitrust suit against Microsoft Corp. Speaking at a conference sponsored by Upside magazine, Case claimed that his company chose Microsoft’s Internet Explorer as its default browser over the rival offering from Netscape Communications Corp because IE was free and – this is the killer – because Microsoft had offered to promote AOL through Windows 95. Microsoft has denied any impropriety. It says antitrust laws don’t prevent it from being a tough competitor, and it continues to insist that AOL chose IE because of its technically superior features and not for Windows co-marketing quid pro quo. However government attorneys say they have an email from Microsoft chairman Bill Gates in which Gates concedes that AOL’s decision was not prompted by IE’s technical superiority over its rival. Rather, they say Gates acknowledged that AOL considered IE merely good enough. The case is scheduled to go to trial on October 15.

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