Microsoft intends to renew its motion to dismiss as a matter of law Novell's antitrust case in Novell v. Microsoft. It sent a letter [PDF] to Judge Frederick Motz informing him of its intention, saying it will file by January 13th. I gather it would prefer to avoid a second jury trial. TechFlash reports Microsoft lawyers will claim that Novell lacks sufficient evidence to support its claims. And IDG's John Ribeiro provides more details on Network World. So, no settlement, as Law.com reports: "Despite the close call, Microsoft's lawyers say they won't pay to make the case go away. 'There are no settlement discussions,' Sullivan & Cromwell partner David Tulchin told us. 'Microsoft believes firmly that Novell's claims have no merit,' he added."
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While we wait, I thought you'd be interested in something Dave Farber recently posted on his IP List about his testimony for the government against Microsoft in the US v. Microsoft antitrust case, which sent me on a trip down memory lane. What Farber was quoted as saying in 1998 after being cross-examined by a lawyer for Microsoft Steven Holley all day was this: "I am endlessly astonished that all too often the trials seem not to be interested in extracting the truth."
Here's what I was reminded of by researching the Farber testimony: Microsoft's defense regarding antitrust allegations associated with its treatment of Java was that it was concerned about Windows running "smoothly". That's essentially the same alibi Microsoft's Bill Gates used in the recent trial with respect to WordPerfect. And Steven Holley, a lawyer on Microsoft's legal team back in 1998, is still representing Microsoft in the Novell case. I can't help but wonder, then, since it didn't work in the '90s, why would anyone imagine it would work in 2011? And deeper, do even Microsoft's lawyers believe it themselves? Anyway, I'll show you what I found.
Here's what Farber posted, an article from the NY Times in 1998, which read in part:
When David J. Farber stepped down from the public stage of the witness stand in the Microsoft antitrust trial last Wednesday after two days of testimony, he found his own private audience eagerly awaiting his return. And he did not disappoint them.
For those who might like to see his testimony, it's
here and here [in .doc format, ironically enough], the day he was drained by Mr. Holley, leading to his comment. He was
on the stand [.doc] the day afterward too for continued cross, redirect, and recross, all the documents coming from Harvard's Cyberlaw collection on the case. And here's Farber's written expert report, all about APIs, how software is developed, Microsoft's bundling of IE, and it claiming it was part of what Farber called Microsoft's "so-called operating system".
Logging on hours after returning from Washington to his home in Landenburg, Pa., the 64-year-old University of Pennsylvania telecommunications professor dispatched an E-mail message. "To all those who I have ignored," the subject line read. The text of the message went on to say, "I have never felt so drained."
In Mr. Farber's case, "To all" refers to a sprawling network of 25,000 Internet users who have maneuvered themselves onto his formidable mailing list over the last decade. His list -- which he calls I.P., for "interesting people" -- has a devoted following among the digerati, as well as less technological types. And it gives him unrivaled, if unofficial, influence as a voice of the Internet.
That status helps explain why the Justice Department chose Mr. Farber as an expert witness for a trial in which a central question is whether Microsoft tried to monopolize the market in Internet browser software....
"I am endlessly astonished that all too often the trials seem not to be interested in extracting the truth," Mr. Farber wrote, after a difficult day of cross-examination by Microsoft's lawyer, Steven Holley.
And here is another
report by the NY Times in 1998, the very day Holley cross-examined Dr. Farber, explaining the "so-called" part -- that back then Microsoft was claiming that the IE browser was part of its Windows "operating system" and couldn't be separated.
on page 2, it shows Microsoft claimed that the reason it polluted Java was to make Java "run smoothly" on Windows:
In the afternoon, James A. Gosling, an executive for Sun Microsystems Inc., whose cross-examination began last week, took the stand again. With sharp questions and the introduction of E-mail evidence, the Microsoft legal team attacked the Government's allegation that Microsoft unfairly tried to ''pollute'' Java, an Internet programming language developed by Sun, because Microsoft viewed the new technology as a threat to its dominance of the personal computer software market.
My, my. Doesn't that sound like what Bill Gates offered on the stand about WordPerfect, that he was worried about it working smoothly?
Instead, Microsoft tried to portray its own work with Java, which it licensed from Sun in 1996, as an effort to make the new Internet programming language work smoothly with Microsoft's Windows.
Let's look at some pieces of Farber's testimony. We learned that the jurors in the Novell v. Microsoft trial were confused about what was an operating system and what was middleware. I think that might be because Microsoft, when it bundled IE into Windows, confused a lot of people. As it happens, Professor Farber testified that IE was an application, not part of the kernel, or operating system. Mr. Holley, as you will see, was trying to move him off that dime, but without success. Here's a snip where the subject matter was whether shared libraries are part of the operating system or not, and Farber of course says they are not. It is Mr. Holley asking the questions:
Q. And my question, sir, is: is the feature "shared
libraries" part of what you say is the operating system
called "Sun Solaris 2.6"?
And I can't resist.
Later, there is this geek answer to a hostile question:
A. Most--the shared libraries is a capability
using--usually implemented by features within the
operating system. It demands certain properties of the
operating system, but the shared libraries, themselves,
are not in the operating system. And probably a good
analogy there is--let me see if I can think of one, good
analogy. It may be hard.
But you need features down in the operating
system which allow you to get at those shared libraries
from various programs, processors, to use the terms of the
trade. That has to be in the operating system. It will
support a nonshared library. It will support shared
So, the operating system has to be enabled to
allow for shared code. The shared code, itself, I would
never consider part of the operating system. Just the
capability that let's you do it.
Q. So, despite the fact that it is listed in this chart
as a core technology feature of Solaris 2.6 under a
heading "operating system functionality matrix," you say
that it isn't really part of the operating system.
A. I said the enabling part for it has to be in the
operating system. The libraries, themselves, aren't in
the operating system. And I very much dispute whether,
you know, IDC is really using operating systems in the
terms--in the way I use it.
But I would have to, again, examine very
carefully what they put in it. My memory serves me from
the deposition that I had real problems with that,
admitting that that label was correct.
Q. If we use the term "operating system" as business
people use it in its normal commercial sense, you don't
have any dispute with the idea that the shared libraries
are part of the product called Sun Solaris 2.6, do you?
A. I hate to repeat a point, but if I use the commercial
version, then the pinball machine and solitaire part of
it, I just, you know--if you use the wrong label, anything
tends to fit that you want to use when put there.
Q. You say in paragraph 21 of your written testimony,
Professor Farber, which appears on page ten--
A. Whoops, just a second. I saw it. Sorry, I was
looking at the report.
Q. Let me know when you're at paragraph 21.
Q. You say there in paragraph 21 that an operating
system developer must expose enough functionality through
API's or application programming interfaces to enable
software developers to write applications in sufficient
quality and quantity to make computer manufacturers and
end users want to license the operating system.
Is that the gist of what you're saying there?
A. That's the gist of what I'm saying, yeah.
Q. That requires exposing many more functions than those
provided by the operating system kernel, doesn't it?
A. When you market a product, I believe you have to have
a kernel--the operating system, as I would like to call
it, to use the terms I use, which exposes enough
standardized interfaces so you can build modules, software
modules, library modules, on top of that interface.
And then the richness of that library you supply
is certainly a part of my evaluation when I go to buy a
package, a complete environment, from a manufacturer to
build applications on.
Q. So the libraries, themselves, expose hundreds and
hundreds of API's which are relied on by application
developers, couldn't they?
A. They expose hundreds and hundreds of API's, some of
which application developers will use and some of which
they won't use.
Q. But all of those API's exposed by the shared
libraries are made available for the use of application
developers, are they not?
A. I believe that is correct. If they are published as
public API's, they should be made available, and their
performance should be somewhat stabilized.
Q. And that is because software developers reasonably
rely on published information about API's exposed by those
libraries in writing their products; correct?
A. I see no reason that isn't correct. You read a
manual, you see what capabilities are provided by the
operating system and the library structure, and you count
on having those, irrelevant of how they're packaged.
Q. In paragraph 23 of your written direct testimony, you
provide new opinions that did not appear in your expert
report that was prepared five weeks before your written
direct testimony; is that correct?
Do you feel what he's feeling and why he wrote at the end of the day that he was drained and amazed that getting at the truth didn't seem to be the goal? Here's Mr. Holley trying to undermine Dave Farber's expertise, of all crazy things to try to do:
A. I could compare the two. I wouldn't doubt it. I do
think in the intervening times.
Q. Can you tell me any of the files in the product
marketed as windows 98 that make up what you call the
Internet Explorer application?
"I will ask you another one." Heh heh. He didn't like *that* answer one bit. But what bothers me is that time is spent going around and around on a question that isn't a real question. Browsers are not part of operating systems. Neither are word processors. Just in case any ex-jurors are wondering what a true computer expert explained at that earlier trial they were not allowed to hear the name of. Surely, Mr. Holley knows by now what an operating system is and what it isn't.
A. I can't recite those. I vaguely remember seeing a
list of them in Professor Felten's testimony, but I am not
prepared to recite them.
Q. Well, what is the basis of your testimony, Professor
Farber, that there is an application called Internet
Explorer if you cannot tell me what it is?
A. I believe Partovi, in his testimony, referenced the
Internet Explorer as an application, and I believe that
that's--confirms my belief that that's an application. I
won't say I saw that. I hadn't seen that at the time I
gave the testimony, but that certainly confirms it.
Q. What files make up the application that you call
A. I'm--I will repeat. I am not an expert in the
structure of windows. I'm saying that as far as
confirmation of my statement that this is an application,
your own employee calls it an application.
THE COURT: Are we going to have Mr. Partovi's
MR. HOLLEY: Well, we are going to look at the
relevant parts of it this afternoon, Your Honor, I think.
I would like to offer as defendant's Exhibit
1411, a drawing that Professor Farber made during his
deposition of his understanding of the structure of
THE WITNESS: I feel like objecting to my art
MS. DE MORY: No objection.
THE COURT: Is there an objection?
MS. De MORY: No.
THE COURT: All right. Defendant's Exhibit 1411
(Defendant's Exhibit No. 1411 was
admitted into evidence.)
BY MR. HOLLEY:
Q. Professor Farber, looking at version one of the
Windows 98 as you drew it at your deposition, can you tell
me what is--what software code is inside the oval at the
top of this diagram that you labeled "Internet Explorer"
A. Again, I will repeat, I am not--I have not had access
to the source code. I am not putting myself up as an
expert on Windows structure. There is clearly some code
that gets executed when you activate IE. It does use
DLL's, and it does interface with an operating system at
So, these are general remarks that hold across
whole spectrum of applications.
Q. As far as you know, Professor Farber, the only code
in that oval, the purple oval, labeled "IE" is a small
stub executable file that calls other routines in
Windows 98 to perform web-browsing functions; correct?
A. I think I'm going to answer "yes, but," and I would
like to just take a moment to explain the but.
Within the DLL's, the shared DLL's, there are a
lot of routines. And again, I don't want to overuse the
grocery bag, but it's not bad in this case. And some of
those routines are used by a lot of shared stuff. There
is no obligation of shared DLL's for everything to be
shared. I have no knowledge whether there is or is not
code in there that's only used by IE. If there is code
that's only used by IE, then I consider it part of IE.
Again, that's something that Microsoft clearly
knows the answer to, and I just haven't had either the
opportunity or the willingness to incur the substantial
problems of nondisclosure in looking inside of Windows.
Q. So, the answer to my question is, you have no idea
what software code is in the oval marked "Internet
Explorer," do you?
THE COURT: I think he said that several times,
MR. HOLLEY: I'm not sure I ever quite got that
answer, but I will move on.
BY MR. HOLLEY:
Q. If the routines that are in the blocks that you
labeled "shared modules" first and then you changed later
to "shared DLL's," are actually what perform the
web-browsing functions in the product called Windows 98,
your position is that they are not Internet Explorer; is
A. My statement is that pieces of that--again, shared
modules, one thing that's clear is the shared modules have
a lot of different things in them, back to the grocery bag
And I have my serious doubts that all of them are
used by just--I'm sorry. What was the parity of the
question? The problem with complex questions is I lose
Q. I don't blame you.
My question is: if you accept my assertion that
the modules that have been highlighted in yellow that you
labeled at your deposition "shared modules" and then later
changed to "shared DLL's," perform the web-browsing
functionality or provide the web-browsing functionality in
the product marketed as Windows 98, but also performed
other functions, your testimony is that they are not
A. My testimony is that it would be--they are not
exclusive for Internet Explorer.
And, in fact, one of my observations and beliefs
is it would be much better if I could split that bag of
groceries open and throw away the stuff I didn't want if I
don't want Internet Explorer. Right now, I'm sort of
stuck with the whole bag.
Am I answering your question, sir?
Q. I will ask you another one.
Then again, maybe not. Microsoft never seems to acknowledge being wrong. The judge in US v. Microsoft, Thomas Penfield Jackson, noted that trait in this Memorandum and Order after Microsoft had been found guilty of antitrust violations:
These cases have been before the Court, and have occupied much of its attention, for the past two years, not counting the antecedent proceedings. Following a full trial Microsoft has been found guilty of antitrust violations, notwithstanding its protests to this day that it has committed none. The Court is convinced for several reasons that a final - and appealable - judgment should be entered quickly. It has also reluctantly come to the conclusion, for the same reasons, that a structural remedy has become imperative: Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct. Untrustworthy.
First, despite the Court's Findings of Fact and Conclusions of Law, Microsoft does not yet concede that any of its business practices violated the Sherman Act. Microsoft officials have recently been quoted publicly to the effect that the company has "done nothing wrong" and that it will be vindicated on appeal. The Court is well aware that there is a substantial body of public opinion, some of it rational, that holds to a similar view. It is time to put that assertion to the test. If true, then an appellate tribunal should be given early opportunity to confirm it as promptly as possible, and to abort any remedial measures before they have become irreversible as a practical matter.
Second, there is credible evidence in the record to suggest that Microsoft, convinced of its innocence, continues to do business as it has in the past, and may yet do to other markets what it has already done in the PC operating system and browser markets. Microsoft has shown no disposition to voluntarily alter its business protocol in any significant respect. Indeed, it has announced its intention to appeal even the imposition of the modest conduct remedies it has itself proposed as an alternative to the non-structural remedies sought by the plaintiffs.
Third, Microsoft has proved untrustworthy in the past. In earlier proceedings in which a preliminary injunction was entered, Microsoft's purported compliance with that injunction while it was on appeal was illusory and its explanation disingenuous. If it responds in similar fashion to an injunctive remedy in this case, the earlier the need for enforcement measures becomes apparent the more effective they are likely to be.
And here we are, so many years later, still seeing victims asking Microsoft to make amends for the harm they say it has done. No wonder the jurors saw it that way. There is a lot of water under this bridge.
And the weird part is that so much of the water is the same water, over and over and over, a seemingly endless fountain of misrepresentation, and lawyers paid to present it as if it were the truth. Imagine if your job was to "prove" that a browser is not an application. What if you had to try to paint someone like Dave Farber as "out of touch with modern computing" in order to try to win the day? How much money would they have to offer you to do that? All the world's riches? Would that be enough? Not for me, speaking just for myself.
Would you like an example? Here's how the NY Times in 1998 described this relevant part of the Farber cross examination:
Toward the end of the day, Mr. Holley got down to the level of individual program files. He displayed a large poster listing 13 major files that testimony had shown were invoked when a computer user sought an Internet address using Internet Explorer, Microsoft's browser.
Microsoft characterized Farber's expert testimony that IE and Windows were not "inseparable", as Microsoft was claiming, as "opinion" and tried to convince the jury Farber didn't know a thing about the subject:
Then he asked Dr. Farber if each file could be deleted without damaging Windows. When the witness answered no to the first two, Mr. Holley pasted large red "no" stickers to the board, to reinforce Microsoft's argument that Explorer is an inseparable, integrated element of Windows.
The theatrics fizzled, though, when Dr. Farber told him that the questions made no sense. Several files in question, he said, were key parts of the operating system invoked by all sorts of programs, not just Explorer.
By asking those questions, the professor told Mr. Holley: "You're asking me if I've stopped beating my wife." A moment later, Federal District Judge Thomas Penfield Jackson, who is hearing the case, asked Mr. Holley, "Can we move on to another subject?"
Microsoft attorney Steven Holley spent more than two and a half hours grilling Farber on his understanding of the inner workings of Windows 98. As Microsoft had with previous witnesses, Holley strove to show that Farber knew little or nothing about the operating system. Holley asked Farber which of the hundreds of Windows files known as dynamic link libraries made up the Microsoft Internet Explorer browser. Farber said he didn't know.
Now, lawyers may not always know their operating system from a hole in the wall. I grant you that. But what about Bill Gates? Do you think he knew whether IE was "inseparable" from Windows?
Then how, Holley asked, could Farber say he knew anything at all about Microsoft's browser? Farber replied it wasn't difficult at all. Microsoft, like all operating system developers, places modules or DLLs in its operating system that other software companies can use with applications that run on top of Windows. Though Microsoft tries to say those DLLs are somehow "inseparable," Farber said, can be redesigned at will so that the browser can be removed without harming the rest of the operating system.
I don't have to answer that question. The judge said it: "Gates was the main culprit."
Of course, what happened in the end was the famous, or notorious, demonstration where Microsoft's demo video turned out to be … well… the word 'doctored' comes to mind. The Register reported what happened:
Microsoft's defence took a potentially fatal hit today in court, as the DoJ demonstrated that a video demonstration had been 'massaged,' and forced Microsoft senior VP Jim Allchin to concede "they filmed the wrong system." Basically, Allchin is in big trouble, and his evidence is toast. The video had been played by Microsoft's defence on Monday. It ostensibly showed how modifications made to Windows 98 by Edward Felten's IE uninstall program caused severe performance degradation. But the video has given prosecution lawyer David Boies a courtroom scene he can dine out on for the rest of his life. Boies went through the video, freeze-framed it and showed that a title bar had suddenly changed in the middle of the 'demonstration.' It had been edited, and the edit had clearly used two versions of Windows, one of which had not been subject to Felten's modifications. Boies hereby wins our newly-created Register Perry Mason of the Year Award, and should reward his unsung researcher handsomely.
Ed Felten gave testimony that it was possible to remove IE and still run Windows, by the way, and here's the cover sheet [PDF] of the demo exhibit he prepared, Exhibit 1202. That's for history buffs.
Here is the transcript [.doc] of the cross examination of Jim Allchin by David Boies on February 2, 1999, and it continues in
this transcript [.doc], which shows Microsoft's lawyer, Mr. Holley, attempting to fix the unfixable in redirect examination of Mr. Allchin. But the first transcript is the one that has the video demo moment.
And that was the end of that fantasy of browsers being part of operating systems among rational beings.
Or it should have been. My point is that if the jurors were unclear as to what an operating system is and what is middleware, there could be a reason.
Judge Jackson spoke about middleware and explained how he viewed it in his 1999
Findings of Fact, which Findlaw refreshingly
offers as HTML, PDF, or WordPerfect -- there is no Word version:
A couple of sentences from the Findings match rather closely what Novell is now complaining about regarding WordPerfect:
28. Operating systems are not the only software programs that expose APIs to application developers. The Netscape Web browser and Sun Microsystems, Inc.'s Java class libraries are examples of non-operating system software that do likewise. Such software is often called "middleware" because it relies on the interfaces provided by the underlying operating system while simultaneously exposing its own APIs to developers.
Currently no middleware product exposes enough APIs to allow independent software vendors ("ISVs") profitably to write full-featured personal productivity applications that rely solely on those APIs.
29. Even if middleware deployed enough APIs to support full-featured applications, it would not function on a computer without an operating system to perform tasks such as managing hardware resources and controlling peripheral devices. But to the extent the array of applications relying solely on middleware comes to satisfy all of a user's needs, the user will not care whether there exists a large number of other applications that are directly compatible with the underlying operating system. Thus, the growth of middleware-based applications could lower the costs to users of choosing a non-Intel-compatible PC operating system like the Mac OS. It remains to be seen, though, whether there will ever be a sustained stream of full-featured applications written solely to middleware APIs. In any event, it would take several years for middlware and the applications it supports to evolve from the status quo to a point at which the cost to the average consumer of choosing a non-Intel compatible PC operating system over an Intel-compatible one falls so low as to constrain the pricing of the latter systems. …
32. To the extent that developers begin writing attractive applications that rely solely on servers or middleware instead of PC operating systems, the applications barrier to entry could erode. As the Court finds above, however, it remains to be seen whether server- or middleware-based development will flourish at all. Even if such development were already flourishing, it would be several years before the applications barrier eroded enough to clear the way for the relatively rapid emergence of a viable alternative to incumbent Intel-compatible PC operating systems. It is highly unlikely, then, that a firm not already marketing an Intel-compatible PC operating system could begin marketing one that would, in less than a few years, present a significant percentage of consumers with a viable alternative to incumbents….
IV. THE MIDDLEWARE THREATS
68. Middleware technologies, as previously noted, have the potential to weaken the applications barrier to entry. Microsoft was apprehensive that the APIs exposed by middleware technologies would attract so much developer interest, and would become so numerous and varied, that there would arise a substantial and growing number of full-featured applications that relied largely, or even wholly, on middleware APIs. The applications relying largely on middleware APIs would potentially be relatively easy to port from one operating system to another. The applications relying exclusively on middleware APIs would run, as written, on any operating system hosting the requisite middleware. So the more popular middleware became and the more APIs it exposed, the more the positive feedback loop that sustains the applications barrier to entry would dissipate. Microsoft was concerned with middleware as a category of software; each type of middleware contributed to the threat posed by the entire category. At the same time, Microsoft focused its antipathy on two incarnations of middleware that, working together, had the potential to weaken the applications barrier severely without the assistance of any other middleware. These were Netscape's Web browser and Sun's implementation of the Java technologies….
410. By refusing to offer those OEMs who requested it a version of Windows without Web browsing software, and by preventing OEMs from removing Internet Explorer -- or even the most obvious means of invoking it -- prior to shipment, Microsoft forced OEMs to ignore consumer demand for a browserless version of Windows. The same actions forced OEMs either to ignore consumer preferences for Navigator or to give them a Hobson's choice of both browser products at the cost of increased confusion, degraded system performance, and restricted memory. By ensuring that Internet Explorer would launch in certain circumstances in Windows 98 even if Navigator were set as the default, and even if the consumer had removed all conspicuous means of invoking Internet Explorer, Microsoft created confusion and frustration for consumers, and increased technical support costs for business customers. Those Windows purchasers who did not want browsing software -- businesses, or parents and teachers, for example, concerned with the potential for irresponsible Web browsing on PC systems -- not only had to undertake the effort necessary to remove the visible means of invoking Internet Explorer and then contend with the fact that Internet Explorer would nevertheless launch in certain cases; they also had to (assuming they needed new, non-browsing features not available in earlier versions of Windows) content themselves with a PC system that ran slower and provided less available memory than if the newest version of Windows came without browsing software. By constraining the freedom of OEMs to implement certain software programs in the Windows boot sequence, Microsoft foreclosed an opportunity for OEMs to make Windows PC systems less confusing and more user-friendly, as consumers desired. By taking the actions listed above, and by enticing firms into exclusivity arrangements with valuable inducements that only Microsoft could offer and that the firms reasonably believed they could not do without, Microsoft forced those consumers who otherwise would have elected Navigator as their browser to either pay a substantial price (in the forms of downloading, installation, confusion, degraded system performance, and diminished memory capacity) or content themselves with Internet Explorer. Finally, by pressuring Intel to drop the development of platform-level NSP software, and otherwise to cut back on its software development efforts, Microsoft deprived consumers of software innovation that they very well may have found valuable, had the innovation been allowed to reach the marketplace. None of these actions had pro-competitive justifications.
411. Many of the tactics that Microsoft has employed have also harmed consumers indirectly by unjustifiably distorting competition. The actions that Microsoft took against Navigator hobbled a form of innovation that had shown the potential to depress the applications barrier to entry sufficiently to enable other firms to compete effectively against Microsoft in the market for Intel-compatible PC operating systems. That competition would have conduced to consumer choice and nurtured innovation. The campaign against Navigator also retarded widespread acceptance of Sun's Java implementation. This campaign, together with actions that Microsoft took with the sole purpose of making it difficult for developers to write Java applications with technologies that would allow them to be ported between Windows and other platforms, impeded another form of innovation that bore the potential to diminish the applications barrier to entry. There is insufficient evidence to find that, absent Microsoft's actions, Navigator and Java already would have ignited genuine competition in the market for Intel-compatible PC operating systems. It is clear, however, that Microsoft has retarded, and perhaps altogether extinguished, the process by which these two middleware technologies could have facilitated the introduction of competition into an important market.
412. Most harmful of all is the message that Microsoft's actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products. Microsoft's past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest.
When Gates became aware of what [original equipment manufacturers] were doing, he expressed concern.... In an effort to thwart the practice of OEM customization, Microsoft began, in the spring of 1996, to force OEMs to accept a series of restrictions on their ability to reconfigure the Windows 95 desktop and boot sequence….
Novell lays out in its original complaint the harm it alleges Microsoft caused to WordPerfect, and it references the US v. Microsoft case:
Gates expressed frustration that [AOL CEO Steve] Case continued to insist on getting an AOL icon on the Windows desktop in addition to the technology, engineering assistance, and technical support Microsoft was offering AOL. Despite the obvious importance that Case attached to desktop placement, Gates said he would not agree to that condition.
IV. LIMITATIONS: UNITED STATES V. MICROSOFT CORP.
Sadly, the question is always the same: is Microsoft deliberately throwing tacks in the roadway to puncture competitors' tires so they either slow down or completely run off the road? The victim changes, and sometimes the tools, but the headlights always point in the same direction. And the part that bothers me the most is that Microsoft never admits to a thing when a victim complains. I have a relative who was speeding and was pulled over by a policeman. You know what he said when asked if he knew how fast he was going? "You caught me." That's the only honorable thing to say, when you do something you know you shouldn't be doing, I think. I confess I do have other relatives who will pretend they are in the right even when confronted with rather obvious proof otherwise, so I know it can happen that way.
14. The United States brought an antitrust action against Microsoft on May
18, 1998 under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, alleging, inter alia,
that [t]o protect its valuable Windows monopoly against such potential competitive
threats [from alternative platforms], and to extend its operating system monopoly into other
software markets, Microsoft has engaged in a series of anticompetitive activities.
Microsoft's conduct includes agreements tying other Microsoft software products [such
as those providing browsing functions] to Microsoft's Windows operating system;
exclusionary agreements precluding companies from distributing promoting, buying,
or using products of Microsoft's competitors or potential competitors; and exclusionary
agreements restricting the right of companies to provide services or resources to
Microsoft's software competitors or potential competitors." Gov't Compl. ¶ 5 (emphasis
15. The United States District Court for the District of Columbia entered
judgment substantially in favor of the United States, and the U.S. Court of Appeals for
the District of Columbia Circuit largely affirmed the District Court's findings and
conclusions regarding Microsoft's liability under Section 2 of the Sherman Act, 15
U.S.C. § 2. A final judgment (to which Microsoft consented) was entered against
Microsoft on November 12, 2002 and is no longer subject to appellate review.
16. Pursuant to 15 U.S.C. § 16(i), the running of the statute of limitations for
the present action was tolled between May 18, 1998 and November 12, 2003, because the
present action is based in part on matters complained of in the Government Suit. See,
e.g., Gov't Compl. ¶¶ 2-5, 7-8, 13, 24-25, 27, 37, 42-44, 54-55, 57-59, 66-68, 93, 95, 97, 99,
131. This Complaint alleges the same operating systems monopolization count as
alleged and proved in the Government Suit; the anticompetitive schemes employed by
Microsoft that are alleged herein and in the Government Suit are similar and have the
same objectives; and the word processing, spreadsheet, and other applications markets
alleged herein fall within the broad software product markets alleged in
the Government Suit.
17. In fact, the Government Suit applied to the whole spectrum of non-
operating system software, like WordPerfect, that competed against Microsoft products.
For example, as contemplated by the allegations in the Government Suit and as found
by the District Court, Microsoft's anticompetitive conduct targeted competing office
productivity applications during the relevant period alleged herein. For example,
Microsoft threatened to withhold from IBM a license for Windows 95 in retaliation for
IBM's decision to distribute its SmartSuite office productivity suite on IBM computers
sold in the United States. See United v. Microsoft Corp., 84 F. Supp.2d 9 (D.D.C.
1999) ("Findings of Fact") ¶¶ 115-132. Similar Findings of Fact were made with respect
to Microsoft's dealings with other software products that Microsoft perceived as
competitive threats, including Native Signal Processing (Intel Corporation), QuickTime
(Apple Computer, Inc.), and Real Networks Corporation's streaming software. See id.
18. In addition, the Government Suit demonstrates how Microsoft's
monopolization of the office productivity applications markets is critical to Microsoft's
maintenance of its monopoly in the operating systems market. According to the
Declaration of Rebecca M. Henderson, filed on behalf of the United States in the
remedies phase, Microsoft Office, in its own right, has the potential to become cross-
platform middleware. Like Navigator, Microsoft Office exposes application
programming interfaces ("APIs"), which are a set of routines, protocols, and tools for
building software applications, and many applications are already written directly to
Office. "Office could also provide a valuable distribution channel for complementary
middleware." United States v. Microsoft Corp., Declaration of Rebecca M. Henderson
¶ 23, at 8-9.
19. Thus, "Microsoft's strong position in applications also gives it a potent
weapon in its attempt to thwart any potential middleware threat .. . [and its] control of
its applications gives it a number of powerful tools that taken together greatly reduce
the likelihood that any competing middleware, including Office, might emerge as an
attractive PC applications development platform." Id. ¶¶ 65-66, at 22. For example,
Microsoft "can keep Office unavailable on alternative platforms and can ensure that it
does not develop into cross-platform middleware. Microsoft can also ensure that its
applications support only Microsoft-controlled or compliant interfaces and can use
preferential access to Office as both a carrot and a stick in working with OEMs, other
distributors, and ISVs." ¶ 66, at 22-23. Indeed, Microsoft used this weapon to force
Office users to use Internet Explorer. Id. ¶ 68, at 23.
20. In addition, because Microsoft was successful in monopolizing the
markets for office productivity applications with Microsoft Office and its constituent
applications (such as Microsoft Word and Excel, Microsoft's spreadsheet application),
Microsoft was able to use that monopoly in order to exclude Netscape from the market
for browsers, maintain and indeed strengthen the applications barrier to entry against
other operating systems, and thereby protect the Microsoft operating systems
monopoly. For example, the District Court in the Government Suit found that
Microsoft threatened to cancel Mac Office, the Microsoft Office product for Apple, Inc.'s
Macintosh operating system ("Mac OS"), unless Apple agreed to bundle Internet
Explorer with Mac OS and to make Internet Explorer the default browser. Because
Apple's business was in steep decline in 1997 and many ISVs questioned the wisdom of
continuing to develop applications for Mac OS, Apple knew that if Microsoft stopped
development of Mac Office, that would signal the death knell for Apple. Within a
month of Microsoft's threat, the two companies entered into an exclusive agreement in
which Apple agreed to these terms, among others, and Microsoft agreed to continue
releasing up-to-date versions of Mac Office for at least five years. Findings of Fact
¶ 350. Thus, Microsoft's incentive to monopolize the office productivity applications
markets was the same as its incentive to monopolize the browser market: to preserve
its operating systems monopoly.
21. In the Government Suit, the government alleged and the courts ruled that
Microsoft was liable for integrating certain browsing technologies with the Windows
operating system in an anticompetitive manner. See 253 F.3d at 64-66; Findings of Fact
¶¶ 155-160; Gov't Compl. ¶¶ 5, 22-23, 36-38, 108. Here, Novell alleges that Microsoft
integrated these same technologies into Windows to exclude WordPerfect and other
Novell applications from the relevant markets. Further, preventing applications that
threatened Microsoft's Windows monopoly from running properly on the operating
system by withholding critical technical information concerning Windows was among
the anticompetitive tactics that Microsoft was found to have employed to harm
competitors in the Government Suit. See Findings of Fact ¶¶ 90-93. "[I]t is Microsoft's
corporate practice to pressure other firms to halt software development that either
shows the potential to weaken the applications barrier to entry or competes directly
with Microsoft's most cherished software products." Id. 93. This is precisely one
of the anticompetitive tactics Microsoft employed to destroy WordPerfect. Moreover, the
government alleged and the courts ruled that Microsoft was liable for using its
monopoly power in the operating systems market to prevent OEMs from distributing
applications that competed with own applications. WordPerfect and
Novell's other office productivity applications were among the victims of this
anticompetitive conduct. These and other anticompetitive acts that were the focus of
the Government Suit are described below in the context of the damages they caused to
56. Microsoft periodically introduced changes to its Windows operating
system that repeatedly degraded the functionality of Novell's office productivity
applications, including WordPerfect and Quattro Pro. As explained below, Microsoft
then withheld the information that was necessary for Novell to restore the degraded
functionality, causing Novell's applications to fail to reach the markets in the timely
manner that was necessary to compete with Microsoft's own applications.
57. For an application to run, it must invoke certain core functions provided by the operating system, such as ways to find, open, close, and save documents.
Applications invoke these functions by communicating with the operating system's
exposed APIs or "extensions." For instance, an ISV wishing to develop a word
processing application with the basic ability to find, open, close, and save documents
would write its software code to "call" the relevant extensions into service on behalf of
58. Windows contains thousands of different APIs providing numerous
functions, and ISVs need documentation published by Microsoft to know how to make
the necessary calls to the APIs. Without the documentation, an ISV must expend a
tremendous amount of resources to recreate functions that are already built into
Windows; indeed, without the documentation, an ISV might never be able to recreate
the functions at all. As the District Court found in the Government Suit, the ability of
an ISV to compete in the marketplace for software running on Windows is highly
dependent on Microsoft's cooperation. Findings of Fact ¶ 338.
So, now, either the judge will grant Microsoft's motion and Novell will have to appeal that ruling, or Novell will have to retry its case from scratch, trying to convince 12 jurors that Microsoft did in fact stab them in the back and that it was damaged by it and deserves to be made whole.
And why did I recount all this history? Because 21-year-old members of the jury may not know much about Microsoft's long history in antitrust.