November 6, 1998 - Friday - Court not in session.
Secret Netscape tapes just not that important:
Microsoft is apparently still convinced that something Netscape did is going to excuse their violation of antitrust law. It is just not so. Even if Netscape tried to trick Microsoft into violating the law it would not excuse Microsoft. The truth is that Microsoft only wants to disparage yet again the name of another company rather than address its own conduct. Does Microsoft really think that if they can find a less than perfect performance by Netscape that somehow that gives them the legal right to force AOL, Apple, Intuit and others to distribute IE at the expense of a competing browser? Perhaps the lawyers for Microsoft would like to explain how the conduct (any conduct at all) by Netscape gives them a legal defense for violations of the antitrust laws and the laws against unfair competition.
The "E" Word:
Yesterday for the first time I began using the word "extortion" when characterizing Microsoft's conduct toward Apple. Some may think this is taking the commentary too far. Some may think that you should never accuse a company of a criminal act unless they have been previously proven guilty. Well. That may be the case. But, look very carefully at what Microsoft has done.
Microsoft has invested a rather large amount of money in developing software for the Apple platform. In fact they are one of the few major software developers who do so. Some in the industry may claim that the only reason they continue to do so is so that at least some other company still exists in the industry and Microsoft does not look like a monopolist. In part that might be true. But, the reasons for developing Apple software are not really relevant here. What is relevant is how and why Microsoft deals with Apple.
Microsoft also invested hundreds of millions in R&D for IE. And, Microsoft does not like competitors developing applications for its platforms if those applications might tend to cut into the operating system monopoly (i.e. browsers and Java like systems). That is okay. No company really wants to loose in the market place. So. Microsoft decides that it is very important to have Apple distribute IE rather than the Netscape browser.
How is this accomplished? Well. If you understand the testimony from Mr. Tevarian this past week all that Microsoft has to do is "threaten" Apple with a slow down of the Office on Apple products. All Microsoft has to do is "mention" that Microsoft could drive Apple out of the business just by slowing down its support of the Apple platform. Would Microsoft really do that? Well. Maybe if Apple were more successful or the Rhapsody product took off, they most likely would. However, doing something is not the same as threatening to do it. Microsoft may have the absolute right to discontinue writing software for any platform including Apple. But, do they have the right to "threaten" to do so in order to get paid or secure a distribution agreement? The answer is maybe and maybe not.
Just what is extortion? Blacks Law Dictionary defines it simply as the "unlawful obtaining of money from another". But, the definition goes on to include "...obtaining of property from another, with consent, induced by wrongful use of force or fear...".
Could Apple survive without Microsoft software? Perhaps. Perhaps not. But, Apples fortunes would be greatly reduced if not rubbed out. So when Microsoft suggests they could drag their feet, Apple must listen and must do what Microsoft says to do. Oh. They resisted. Microsoft wanted Apple to "knife the baby" (Quicktime). Microsoft was hoping to get rid of not only Netscape as a competitor but also remove Apple itself from the scene. This was a big time play.
The suggestion by Microsoft that Apple somehow had Microsoft over a barrel is a bit ridiculous. For one, Apple got nothing for their "suggestions" or "threats" if you insist upon calling them that. Threats of lawsuits are meaningless unless the other party agrees with the legal position. Otherwise, it is just ignored.
What Microsoft received was a deal to bundled IE with all Apple products. What Microsoft received was the removal of a key distribution point for Netscape and deal to bundle IE not only with Microsoft platforms which it could do itself but also Apple platforms. Now, IE was bundled with 98 to 99 percent all desktop systems sold in the world. This deal sewed up the forced distribution of a key product in Microsoft's business plan.
Threatening Apple with bankruptcy was the sure way to get it.
This is not "hardball" as the defenders of Microsoft like to say when inappropriate business practices are disclosed. This conduct borders on the line for "extortion". Is this act in furtherance of the monopoly that Microsoft has in desktop operating systems? (Even Bill Gates with his bad memory must agree that it sure does help a lot.)
Why did AOL go with IE? Oh yea. If AOL went with IE instead of the Netscape product, Microsoft would put their logo on the advertising page of the OS and not drive MSN to compete with AOL. Well this act with AOL is not the same as threatening bankruptcy. But, I know of no person in the computer industry that would not listen very carefully to what Microsoft was suggesting they should do when presented with those two suggestions. Mr. Colburn from AOL was correct. Technology differences just did not count in the decision process. What counted was the ability of Microsoft to advertise on their monopoly space and the willingness of Microsoft to can MSN. Dropping MSN is a carrot. Dropping Office for the Apple platform is a club with rusty spikes. Either way, technology was just not relevant. Economic power and force was the determining factor. This is called "using monopoly power to secure yet another monopoly in a second market". This is called "using monopoly power to preclude competitors from selling their products".
Re-read the definition for extortion. Can extortion be proven beyond a reasonable doubt? Probably not. After all, O.J. Simpson was acquitted using that standard of proof. But, does that mean that people in the industry do not know about the ethics and business standards applied by Microsoft when dealing with other companies?
I do not think Microsoft is fooling anyone here.
November 5, 1998 - Thursday
It is becoming very clear how Microsoft operates.
Microsoft always uses its monopoly power to force consumers and to force competitors to do what Microsoft wants them to do. Even if it means killing off technology. Even if it means forcing consumers to buy unwanted products. The only thing that matters is that Microsoft maintain its monopoly and preclude any and all competition.
Microsoft continues to argue that somehow Apple has the ability to influence what Microsoft does.
I find that suggestion to be totally ridiculous. Apple can no more tell Microsoft what to do than I can tell them what to do.
Microsoft is coming across as the big bully on the beach who charges that some little wimp forced him to act the way he does. It is completely unbelievable.
Sooner or later, Microsoft will have to just admit that they do bully everyone they can and argue that they have the legal right to do so. To suggest they do not act in this way is not convincing anyone. The only legal argument that Microsoft has is that they have the legal right to force the sale of IE upon everyone because they put it into the same box as the OS. I am sure they will get around to that "magic show".
Mr. Tevarian seems to understand monopoly power and market forces. But, Microsoft is trying to convince someone that they do not. I have no idea who they think they are convincing. Microsoft is making a complete fool out of themselves by continuing to suggest totally unbelievable positions and situations.
Personally, I can not recall any company in any industry that acts with more disrespect of both its own customers and companies with which it competes. Then Microsoft goes one further and tries to convince the court of completely unbelievable suggestions.
Apple has clearly been threatened with bankruptcy by Microsoft.
Apple has been asked to kill highly innovative and advanced projects (Rhapsody and Quicktime) simple because Microsoft does not want to have any competitors for the products it wants to sell.
And, then they have the guts to argue in court that Apple is trying to force Microsoft to do something.
Incredible.
Microsoft is using extortion to get IE into the hands of all consumers. They threatened Apple with bankruptcy. They threatened to force Apple to "kill" Quicktime. They threatened to stop development on Office for Apple.
They got IE bundled in all Apple systems. Feat accompli. They got IE bundled in all desktop systems.
They have forced all consumers to buy IE.
November 4, 1998 - Wednesday - Day after Election Day
Thought for the day: How can anyone ever claim to have preferred IE if everyone must buy it? (When you vote, you have a choice and your choice counts for something. When Microsoft makes certain that you must purchase, install and maintain IE everyone loses their choice. If there is only one name on the ballot and your guy wins, nobody will care what you think. You did not have a choice either.)
Back to the core of the apple...
Apple charges Microsoft will sabotaging Quicklime. (sound familiar?) Misleading error messages, technical bypasses etc. that deprived QuickTime of the opportunity to process certain types of multimedia. This does sound a lot like RealNetworks. Microsoft again is holding up advances in technology simply because they do not control it. (Those false error messages sound just like the message that Windows 98 comes up with when you install it via a boot manager.)
Tevanian thinks the word "sabotage" is appropriate. Real networks thought so too. I am sure Sun thinks sabotage is the appropriate word.
Gee even Tevanian knows a monopoly when he sees and feels it. The legal definition for "monopoly" could apply if Apple had a 30% market share which of course is three times what they have.
What is clear here is that Microsoft always drags its help when advanced technology belongs to someone else. They always try to sabotage it. Java, QuickTime and Real Media. It is always the same answer. Microsoft does everything it can to prevent very innovative products from running on Microsoft platforms until they can catch up and suppress the company itself.
Just how many witnesses have to line up before it is obvious that Microsoft suppresses advanced technology every chance it gets.
If it does not come from Microsoft, it is suppressed by them. That is becoming very obvious.
Is that illegal? If it furthers the monopoly that Microsoft has, the answer may be yes. If it precludes competitors from introducing products in the market not controlled by Microsoft, the answer may be yes.
Some people really do think that Microsoft should control the introduction of all technologies. Microsoft clearly does think so. And, it seems to be using its monopoly power to force that thinking upon the entire industry. So much for the line that Microsoft supports innovation. They suppress innovation. They only support their own products. So. If they do not own it, it is suppressed by Microsoft if they possibly can. Again, look at the message when you try to install Windows 98 using a boot manager. Just one more example of false and misleading statements offered by Microsoft for the specific effect of discouraging the use of advanced technology that they do not own.
Microsoft has lost all creditability. Apple is not the bully here. Apple has absolutely no ability to get Microsoft to do anything. To suggest otherwise is to prove that either the speaker has no idea what is going on in the industry of they are just thinking wishfully out loud. This case is not about Apple threatening Microsoft. Indeed they can not. Even if they did threaten a large law suit, it would be meaningless unless Microsoft thought it was valid.
Microsoft is striking out big time here. Microsoft threatens Apple with bankruptcy if they withdraw Office support on the Mac and Microsoft suggests that the possible threat of a law suit is going to make Microsoft jump? For one, Apple did not threaten the law suit. Two. The threat is only as good as Microsoft feels the suit is valid. All attorneys know that. Heck. I, as an attorney, can threaten Microsoft will a law suit for billions. But, they will do nothing but laugh. Unless they think it might have merit. They would most likely still laugh hoping the press and public watching does not understand it.
The real question (so far unanswered) is what would Microsoft do if Apple did proceed with the Rhapsody product? Cancel Office on the Mac anyway? A number of very good operating systems have not seen the light of day simply because not enough developers were willing to write applications for it. Everyone in the industry knows that for a fact. Heck. Even Bill Gates knows that. Although he seems to have forgotten almost everything else lately.
November 3, 1998 - Tuesday - Election Day - Court Not in Session
Unless the PR departments are all out voting news will continue to leak out.
Yesterday's presentation of the video tape of Bill Gates is very telling. What you see is an extremely intelligent person acting like a low level employee that has not the foggiest idea of what the computer software industry is all about.
It is unbelievable that Bill Gates can not remember the deal he wanted his troops to sign with Apple. He remembers quite clearly. But his lawyers know how damaging the truth here is to their defense. So they have just told him he is going to have to play the dumb guy on TV. I guess it is everyone's right to look stupid if they want to.
Forcing all customers to buy an unwanted product and then playing dumb about how that is accomplished is truly a feat. Not a very believable one, but a feat none the less.
It is a good thing we have other witnesses to tell us what really happened and how a monopolist can dictate even what other companies do with their products.
There is no reason why Bill Gates should have to admit what he does to earn his fortune. But gone are the false arguments over innovation and giving customers what they want.
Customers do not want IE. Customers want to pick and choose their applications. And, so much of the effort that Microsoft engages in is to preclude not only competitors from selling their products but also to preclude the most important right that consumers have, choice. The choice to pick between products that serve a particular need. And, choice not to buy unneeded and unwanted products.
Microsoft's philosophy runs counter to the basic needs and rights of consumers. Microsoft's only objective is to force the sale of the products it wants to be dominate in tomorrow. And, it will use a currently held monopoly to force that upon all consumers. And, that is a violation of the antitrust laws.
If you really want to know how to force the sale of your products upon the consumer, stay tuned. But, do not expect Bill Gates to tell you how he does it. Certainly not during an antitrust trial.
November 2, 1998 - Monday, Third Week
1:00 PM PST
I find it absolutely amazing that a person so highly acclaimed by the computer software industry as being astute and a master at developing a market for computer software has a hard time remembering communications with Apple Computer. Gosh, Microsoft even invested large sums of money into that company (hundreds of millions). But, now he does not understand simple economics?
And, now we are to believe that Bill Gates does not remember why he was communicating with Apple or what he was trying to do?
Microsoft, it's attorneys and Bill Gates are very aware of their violations of antitrust law. That awareness is what is causing this apparent inability to remember or understand the computer software industry. Microsoft is acting just like a little kid caught with a handful of cookies and a busted jar on the floor.
Just who are they trying to fool? Are they trying to fool Mr. Tevarian? No. He understands it quite well. Are they trying to fool the DOJ? No. They understand it as well. Are they trying to fool their customers or the judge? Are they trying to fool others in the industry? Are they trying to fool the journalists? Are they trying to fool ISVs and OEMs? Just who are they trying to fool?
The Bill Gates put up by Microsoft now could not get a job anywhere in the industry. Not as a developer, not as a salesman and certainly not as a CEO.
I guess no person at Microsoft has a clue why they bundled IE with the OS. And, they have not a clue why Apple does the same.
Coming up: Avadis "Avie" Tevanian, Apple Senior Vice President
And, the Bill Gates video is a joke.
2:18 PM PST
Microsoft is going to suggest that Apple threatened Microsoft with a 1.2 billion law suit to get what? Apple wanted the right to bundle IE? And, it gave up its legal claim to be able to sell IE? I would believe that Apple would drop its legal claim and bundle IE in exchange for $150 million and Microsoft's pledge to continue to develop Word for Apple products. But, I am just not sure how Microsoft thinks that Apple got any benefit out of this deal.
Microsoft threatened Apple with bankruptcy in order to force Apple to bundle IE with operating systems on Apple products too.
With that deal in place 99% of consumer operating systems are bundled with IE. That is the deal here. Apple got nothing for going along with Microsoft. They got nothing at all. I guess if the mob came to your house and threatened to kill your entire family, you should be happy they did not do that. But, that is not a "benefit" of agreeing with them. That is illegal force of an unparalleled nature. Microsoft is truly cruel in their so-called "business offers". Dropping a possible 1.2 billion dollar suit benefits Microsoft not Apple. Apple got nothing in this deal.
Daily Wrap and Flow - Week Two
Daily Wrap and Flow - Week One