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Microsoft Web contracts tougher than Gates claims

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A year ago Posted 30th March 1998 Bill Gates may have misled the Senate Judiciary Committee in his testimony earlier this month, according to this morning's New York Times. The Times quotes from a Microsoft Web partner contract passed to it by an anonymous industry executive, saying that the partner should promote Internet Explorer exclusively on its home page "and any other pages where similar promotions are placed." This could clearly be interpreted as locking out NetScape by stopping NetScape being engaged in "similar promotions," but a further section seems even more conclusive: [the partner] agrees that neither it nor its affiliates will directly or indirectly license or otherwise authorise distribution, transmission, marketing or promotion in the territory of company content or logos by companies which produce other browsers." Talking to the Judiciary Committee, on the other hand, Gates claimed that any contractual restrictions were limited to the partner company's home page, and that NetScape could be promoted anywhere else on the site. It took the committee quite some while to nail him down even to this extent, but if the Times document is genuine it seems he wasn't nailed down quite hard enough. The problem here is probably that old Microsoft one, meaning. The company's stance is that any restrictions it places on its partners in its contracts are minor, reasonable ones designed with reasonable goals in mind. If for example a magazine ran an article about NetScape with an advertisement for Explorer opposite, one of the companies (we're not sure which) would be pretty angry. But even if Microsoft's intentions are perfectly reasonable and genuine, what Microsoft's contracts actually say, and the way its partners may interpret them, is a different matter. If you get this kind of stuff coming onto your desk whenever you renew a contract, then slowly but surely (or even fairly quickly) you're going to get the impression that not getting too enthusiastic about Microsoft's competitors is a smart idea, if you want to carry on doing business with Microsoft. ®

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