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February 24, 1999


By CBR Staff Writer

By Dan Jones in Washington

The government returned to the central theme of its case against Microsoft Corp yesterday afternoon – that the software behemoth bends PC OEM manufacturers to its will, precluding consumer choice. The government’s lead attorney, David Boies, examined Microsoft’s Windows 98 licensing deals, concluding that Compaq Computer Corp had been offered preferential treatment. He also looked at the way Gateway Inc’s requests to change the default browser on Windows 98 had been dealt with at Redmond. The witness, Microsoft’s Joachim Kempin, a senior vice president responsible for OEM agreements, indulged in nearly three hours of back-and-forth questioning on OEM deals. The afternoon started with a video demonstration of the boot-up procedures of several OEM machines with Windows 98 preinstalled. Microsoft hoped to demonstrate that OEMs were free to put any software they pleased – including Netscape Communication Corp products – on their machines and extensively customize them. However, Boise quickly established that Compaq had a different contract with Microsoft then other OEMs such as Hewlett-Packard Co and Sony Corp. Compaq had wanted to launch their registration software after the Windows 98 ‘welcome’ module and they won this right in their new Windows contract on April 1, 1998. It was found that this approach did not work, so Compaq and Microsoft put the software before the Windows 98 introductory ‘splash’ screen. Kempin insisted that other manufacturers would be free to put their registration screens up before the Windows welcome module – as long as they asked. Outside the courtroom, Microsoft spokesman Mark Murray denied that Compaq’s contract was in any way reflective of special treatment and he said that differences had occurred because Compaq had only recently signed a new deal with Microsoft. However, Boies cited the agreement as another instance of the sticky coterie formed between Microsoft and Compaq. Kempin told of an of approach by PC manufacturer Gateway to him in May of 1998, requesting to be allowed to give the user the option to change the default browser in the Windows boot-up sequence. Kempin said that he told them to go ahead and do it but had never heard about the results. Kempin was shown an internal Microsoft document from April 24, 1998 which discussed the fact that Gateway wanted to remove the Internet Explorer 4 icon and a substantial portion of the code. We were not prepared to give them that, he said. Boies then finished the day’s examination asking why OEMs and users could not uninstall IE4 in the same way that previous versions could be. Kempin cited differences between the new version and the others, referring to the fact that the browser, and the concept of the browser, are deeply embedded in the new OS.

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