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Secret trial evidence II – how MS brought Gateway to heel

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MS on Trial The first von Holle deposition revealed that Microsoft was being difficult about the renewal of Gateway's Windows licence. Microsoft allowed a temporary extension to the agreement that expired on 30 June 1997, but was not about to let Gateway rest easy until Gateway came to heel and stopped asking for concession that potentially threatened the Windows monopoly. Von Holle said Gateway was "not allowed to remove any ... icons that Microsoft pre-configures [such as IE3]. Asked if Gateway believed it would be of value to the end user if they wanted a PC that would boot straight into the Gateway customised version of Communicator, he replied that he believed it would be "a much simpler environment for the end user". He added: "If the user is not required to boot or launch an application directly from Windows and there was some sort of an underlying layer that sat between the interface and the PC operating system that abstracted those commands, then there would definitely be a threat to Microsoft Windows" because "the requirement for Windows would not be there", so allowing other operating systems to be used below the browser. From Gateway's standpoint, an interface that is independent from Windows as the underlying operating system would "give more [operating systems] competition in the industry, and more choice for the end users...The competition would do two things: it would force lower prices [of operating systems] in the industry and it would also force more innovation in the industry." The result would be lower computer prices, he concluded. Brave words, but he was a virginal deposant. Gateway gave written responses to DoJ Interrogatories, which showed that it wanted to remove the IE icon. Microsoft responded that if it did so, it would lose its Windows licence: "On several occasions, Gateway representatives have asked Microsoft to remove the icon for IE from the desktop but Microsoft representatives have refused each request, saying that the browser cannot be removed or sold separately. In addition, Gateway is precluded from unilaterally removing IE from Windows 95 because the OS Agreement does not grant Gateway the right to modify any part of the licensed software. "In fact, Section 2(g) specifically reserves to Microsoft all modification rights and rights to the source code for Windows 95. In addition, Microsoft representatives have repeatedly stated that Gateway has no right to modify the source code for the operating system. As a result, Gateway must provide IE with each Gateway system that is sold with Windows 95." "Moreover, Microsoft representatives have repeatedly said verbally and in electronic mail messages to Gateway representatives, including Richard Brownrigg, that Microsoft will not allow Gateway to modify or customise one key portion of the desktop created by IE4. The desktop will consist of three elements of an 'active desktop' that will allow real-time information to be relayed to the end-user interactively. One of these elements is a 'channel bar' that organises information available on the World Wide Web into a number of 'channels'. Each channel contains information and hyperlinks supplied by a third party content provider. Gateway representatives have indicated a wish to customise the channel bar for IE4 to allow Gateway to provide channels that are unique to each customer. Microsoft representatives have said, however, that Gateway and other OEMs may not remove any of the channels delivered by Microsoft. The only modification that Gateway will be allowed is to add one channel that provides Gateway content. The DoJ also produced evidence that Gateway (and Packard Bell) did not want to have the IE icon compulsorily cluttering the desktop. An email from James von Holle to Gayle McClain at Microsoft noted: "We need to be able to remove icons the customer does not want. We want IE to have 'uninstall' for as much of the code as possible without disabling the system." Von Holle saw desktop 'clutter' as being confusing to users. Microsoft, of course, had a rather different view. ® Related stories Gateway exec's secret MS evidence Give in or we'll audit you Complete Register Trial coverage

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