Excerpts Fr Judge "Finding Of Facts"

["R A Kaup sr." <papaw626@xxxxxxxxxxx>]

Hi All, This from Tourbus an email service from Patrick Crispen and Bob
Rankin. He read all the 410 pages and pulled 3 excerpts he thought strong.
They follow. I thought the last paragraph very strong stuff about stifling
new competitive products. Interesting reading.. BobK

168. Once [Microsoft senior vice president Paul] Maritz had decided
that [Microsoft Senior Executive James] Allchin was right [about
Microsoft's not binding Internet Explorer tightly enough to Windows
and as such missing an opportunity to maximize the usage of Internet
Explorer at Navigator's expense], [Maritz] needed to instruct the
relevant Microsoft employees to delay the release of Windows 98 long
enough so that it could be shipped with Internet Explorer 4.0 tightly
bound to it.  When one executive asked on January 7, 1997 for
confirmation that "memphis [Microsoft's in-house code for Windows 98]
is going to hold for IE4, even if it puts memphis out of the xmas ...
window [for shipping Win98 to Original Equipment Manufacturers like
Dell, Compaq, and Gateway]," Maritz responded affirmatively and
explained,

      The major reason for this is . . . to combat Nscp, we have to []
      position the browser as "going away" and do deeper integration
      on Windows. The stronger way to communicate this is to have a
      
'new release' of Windows and make a big deal out of it. ... IE
      integration will be [the] most compelling feature of Memphis.

Thus, Microsoft delayed the debut of numerous features, including
support for new hardware devices, that Microsoft believed consumers
would find beneficial, simply in order to protect the applications
barrier to entry.

-----

355. Apple increased its distribution and promotion of Internet
Explorer not because of a conviction that the quality of Microsoft's
product was superior to Navigator's, or that consumer demand for it
was greater, but rather because of the in terrorem effect of the
prospect of the loss of [Microsoft Office for the Mac].  To be blunt,
Microsoft threatened to refuse to sell a profitable product to Apple,
a product in whose development Microsoft had invested substantial
resources, and which was virtually ready for shipment.  Not only would
this ploy have wasted sunk costs and sacrificed substantial profit, it
also would have damaged Microsoft's goodwill among Apple's customers,
whom Microsoft had led to expect a new version of Mac Office.  The
predominant reason Microsoft was prepared to make this sacrifice, and
the sole reason that it required Apple to make Internet Explorer its
default browser and restricted Apple's freedom to feature and promote
non-Microsoft browsing software, was to protect the applications
barrier to entry.  More specifically, the requirements and
restrictions relating to browsing software were intended to raise
Internet Explorer's usage share, to lower Navigator's share, and more
broadly to demonstrate to important observers (including consumer,
developers, industry participants, and investors) that Navigator's
success had crested.  Had Microsoft's only interest in developing the
Mac OS version of Internet Explorer been to enable organizational
customers using multiple PC operating-system products to standardize
on one user interface for Web browsing, Microsoft would not have
extracted from Apple the commitment to make Internet Explorer the
default browser or imposed restrictions on its use and promotion of
Navigator.

-----

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.


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