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Previous page In Case Any of you care to hear "our" side... Subject: DOJ Case: What's Happening Last week we finished the first phase of the DOJ trial. We thought it would be useful at this juncture to provide you with a report concerning the claims asserted against Microsoft and how the evidentiary record is shaping up. You may forward this mail within your organization if you wish. INTRODUCTORY COMMENTS It is not easy for any company to be the subject of a full scale monopolization case brought by the U.S. government. This case has been no exception. Here the DOJ, nineteen states and Microsoft’s leading competitors (Netscape, AOL, Sun, IBM and Apple) have allied to attack Microsoft’s efforts to develop and market Internet-related software (and other software). As you know, the allegations of wrongdoing—some of them quite sensational—have received a great deal of attention in the press. Microsoft did everything it could to avoid this lawsuit. Most importantly, in the weeks before the case was filed we worked cooperatively with the government to try to find a resolution short of litigation that would be acceptable to both sides. Unfortunately, we were unable to find any solution that satisfied the government while preserving Microsoft’s freedom to design and develop innovative new software products. So we have this lawsuit, and all the allegations that go with it. Fortunately, lawsuits are decided on the basis of law and facts, not allegations and mere hearsay. The law is fairly well understood, having been established by more than 100 years’ worth of cases decided under the nation’s antitrust laws. Similarly, although press reports inevitably focus upon points of controversy, the central facts relevant to the applicable legal principles are largely undisputed. We believe that these facts—now established in the evidentiary record—clearly show that none of the Microsoft conduct challenged by the government is anticompetitive. Quite to the contrary, nearly all of the Microsoft conduct at issue in the trial is affirmatively pro-competitive—conduct that antitrust law is designed to promote. Competitors are supposed to compete, and that is what Microsoft has done. We are proud of the great job our platform developers have done building strong support for Internet standards into Windows. We are proud of the great job the Java team has done building the fastest, most compatible implementation of a Java virtual machine and the industry’s leading Java dev tools. We are proud of our efforts to rapidly disseminate improved versions of Windows to the marketplace, both through new releases of Windows and through broad distribution of Internet Explorer upgrades to existing Windows installations. All of this conduct directly benefits ISVs, OEMs and customers. And all of it has been challenged by the government. We believe that the government’s case against Microsoft is profoundly anti-consumer. Developing innovative new technology and broadly distributing that technology to consumers is exactly what every computer company is supposed to do (regardless of its market share). The government has created a lot of noise around various random incidents ‘or pieces of email. Although these incidents have generated headlines, much of this evidence has been largely or even entirely irrelevant to any of the issues in the case. Much of it simply reflects the intensity of competition with the software industry, routine interactions among computer companies, or internal discussions of ideas that were never implemented. Strong language, however, is not illegal. Next page

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