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  1. Technology
February 11, 1999


By CBR Staff Writer

By Nick Patience in Washington

Having apparently proved to most observers that Microsoft Corp restricted the ability of internet service providers to distribute Netscape Communications Corp’s Navigator browser, US government attorney David Boies at the antitrust trial in Washington yesterday set about trying to prove that the company imposed similar restrictions on America Online Inc – the world’s largest online service provider. And the Microsoft executive on the stand, Brad Chase, has a lot of work to do next week to try and convince the court that AOL was not unfairly restricted by its contract with Microsoft, which was signed in March 1996. After questioning from both Boies and Judge Thomas Jackson, Chase admitted that AOL was not permitted to promote Netscape’s browser in the download area of its proprietary online service. It is permitted to show a download screen and two other areas promoting other Netscape technology, said Chase, but they are not permitted to promote Netscape on the main screen or where the user types in keywords. By typing in ‘Netscape’ or ‘Navigator’ users are taken to page where they can download the browser. But how do they know to type in Netscape, asked Judge Jackson? Keywords are the most common way of navigating around AOL, said Chase, adding you could just try [a word]. There are a lot of words I could try, said Judge Jackson. Finally, Boies asked Chase, is AOL permitted to tell users how to get Navigator? I don’t think so, he replied. That AOL appears to be restricted in its ability to promote the technology of Microsoft’s competitors and a central part of its contract was the inclusion of AOL in its desktop online services folder, is an attempt by the DoJ to show that Microsoft unfairly used its control of the dominant operating systems platform to secure a crucial distribution deal for its browser. Boies moved on to the question of why Microsoft wanted the AOL contract so badly. Back in late 1995 and early 1996 it was common knowledge that AOL was looking for a replacement for its proprietary Booklink browser. The two companies met at Microsoft’s headquarters in January 18 1996 for one of the first times. Chase and Bill Gates attended the meeting, and according to an AOL account written three days later, Gates asked, how much do we have to pay you to screw Netscape? Chase said I was at that meeting and Gates did not say that, adding, I don’t know what they were thinking, though he admitted we certainly were trying to sell AOL hard. In a Microsoft memo prior to the meeting, Gates wrote (regarding the two browsers) that he hoped AOL would exploit ours and not Netscape’s. Boies asked if the contract included a clause requiring AOL to exclusively promote, market and distribute Microsoft’s browser. Yes, but that doesn’t make it an exclusive promotion, said Chase, using the same logic employed apparently unsuccessfully by his predecessor on the stand. By that, Chase meant that AOL could promote non-Microsoft browsers but there were a few exceptions, which he details in his written testimony. They include the ability of AOL to distribute Navigator and, if users specifically request it, the ability to supply it on non-Windows and Macintosh platforms. Then Boies, in typical style, threw Chase’s own words back at him. All of those exceptions are pretty remote, he said, before producing an email written by Chase on March 14 1996 saying that there are exceptions to the deal, but they are pretty remote. Chase went on in the email that to all intents and purposes, AOL will move its 5 million customers to a new client with IE3 starting this summer/fall. Later Chase disputed the account of an earlier government witness, AOL’s David Colburn, who was also involved in negotiating the deal with Microsoft. Chase relayed a story of how the two men were having lunch in a diner after the deal had closed and Chase asked Colburn why AOL had chosen IE. Chase said Colburn focused on the componentized technology that would enable AOL to adapt the browser to its needs in particular, as well as the ability of it to brand it as AOL. Being part of the online services folder on the Windows desktop was important to Colburn, admitted Chase, but the technology and branding were the major reasons behind its decision. That conflicts with Colburn’s version of events, but Chase said, I know what he told me. Chase said that it would have been tougher to close the deal without Microsoft’s ability to include AOL on its desktop folder, but he said it was not clear to him that the deal could not have been done without it, as Boies had suggested.

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