Court documents reveal MS moves to lock-in OEMs, users

Another batch of documents has been released by the DoJ over the past few days. Here are some highlights. The document reference numbers are given in each case -- GX means government exhibit, followed by the number. Boot-up Sequence Microsoft VP Brad Chase wanted a "proprietary hook" (aka an undisclosed call) in Windows that would make it possible for Microsoft "to move the Sign Up Wizard into the boot up sequence somewhere before we give control to the OEM. This way we can increase the likelihood that an end user gets the option to sign up for solutions that promote IE before they get into the desktop... " He went on to note that an OEM could run a DOS program that could defeat this, but "most OEMs won't go through the hassle to develop such a DOS utility". Of course, Microsoft eventually achieved this objective by a condition in the licence that prevents an OEM from modifying the boot sequence. [GX176] Those who harbour deep suspicion about Microsoft's registration wizard will find a detailed description of the REGWIZC.DLL in a document supplied to Packard Bell by Microsoft in May this year. [GX1195] Microsoft and Browser Market Share In April 1997 at a Microsoft internal market review, Kumar Mehta had a slide that showed that 81 per cent of Navigator users who knew about IE -- some 6 million users -- would not switch to IE. The main reasons were: prefer what I have (30 per cent); no reason to switch (20 per cent); IE is unreliable/bugs/problems (12 per cent). This challenges Microsoft's marketing pitch that users overwhelmingly prefer IE (when they have a choice). Twice as many users who were aware of IE and Navigator thought Navigator was better, Microsoft admitted to itself. Despite what Microsoft had been claiming in court, its own belief was that "OEM is [the] leading distribution channel for IE", and that "Navigator outsells IE by a million copies at retail", and "five times as many Navigator copies had been distributed by IS". [GX415] Paul Maritz held an executive retreat in February 1996 at which the threat from Netscape was the main topic. At that time, Microsoft was well aware it was behind in market share, perception and browser features. However, even at that early stage, Maritz was concerned to "neutralise Java" and "get control of Java with Java support/tools". The idea to "make Windows the Intra/Internet browser" was discussed. [GX503] Microsoft's Tough Agreements The text of a Microsoft Agreement that prevents OEMs from modifying the boot-up procedure was given in an exhibit. It was hardly surprising that the DoJ was so hot under the collar about the anticompetitive measures that Microsoft had included in such agreements. Microsoft would not allow any interference by the OEM from switching on the PC until the desktop screen was displayed. If Microsoft found any OEM not following the Agreement (as happened notably with Compaq), apart from remedies such as refusing to license Windows 95, Microsoft also reserved the right to charge "an additional royalty equal to 30 percent of the highest royalty for the product(s)." This is confidential, so don't tell anyone: Microsoft charged AST $35 per system for the English version of Windows NT Workstation Upgrade Version 4.0, and an additional $6 for non-English versions. These gems are in an addendum to AST's agreement, dated 9 July 1996. [GX1035] There is also a copy of the Active Desktop Agreement between Microsoft and CNET that sets out the onerous support and marketing requirements for Active Platform licensees. There were support requirements and promotion requirements. It has to be admitted that Microsoft works very hard to develop such detailed requirements - even if Active Channel is a flop. For example, so far as COM objects (ActiveX Controls or Java Applets) are concerned, they must be included: "COM objects are self-contained pieces of code that bring unique interactivity to sites not possible with HTML-only pages. COM objects can be written in many languages such as C++ or Java. Web site must use at least one such control on at least one of its top 5 most visited pages." Than goodness the Opera browser allows animation to be switched off. [GX1163] Gluttons for punishment will also be interested in the 52-page Disney Active Desktop Marketing and Distribution Agreement. [GX1176] Complete Register trial coverage