When Microsoft backed a key motion filed two weeks ago in Epic Games antitrust lawsuit against Apple, it raised a few eyebrows.
Two decades ago, the US Justice Department, 18 states, and the District of Columbia sued Microsoft on allegations the Windows operating system represented a monopoly that the company was wielding to prop up its then fledgling Internet Explorer browser, in violation of the Sherman Antitrust Act of 1890. The suit expressly claimed that Microsoft was using Windows to freeze out the Netscape browser and, more tacitly, Sun Microsystems cross-platform Java platform as well.
The software maker vehemently bristled at the allegations and claimed that the action represented a government intrusion brought at the behest of companies that couldnt compete on the merits. Microsoft warned that the action would set a dangerous precedent that could stifle innovation for years to come.
The company's legal response was one of the most vigorous Ive covered in my 25 years as a journalist. The PR campaign reached shock-and-awe proportions, as well, with handlers at one point arranging a poorly executed astro turf campaign intended to galvanize public opinion against the legal action.
Now, in 2020, a Microsoft executive has submitted sworn written testimony in support of plaintiff Epic Games alleging that Apple has a “complete monopoly over the distribution of apps to the billion users of iOS … to coerce app developers into using Apples payment platform.”
The legal declaration, from Microsoft Gaming Developer Experiences General Manager Kevin Gammill, came in response to Apple's threat to deny Epic access to software development tools it needed to develop its Unreal Engine game platform for use on iOS. Apple made the threat after Epic tried to use its own payment system in the iOS version of Fortnite to get around Apple's 30-percent platform fee. That move quickly got the game pulled from the Apple App Store and led Epic to file a lawsuit in response.
Gammill said that any move harming development of Epic's Unreal Engine on iOS would hurt Microsoft's business, because "in Microsofts view there are very few other options available for creators to license with as many features and as much functionality as Unreal Engine across multiple platforms, including iOS."
Role reversal
While Microsofts filing expressed no opinion on the underlying antitrust claims, the declaration nonetheless illustrated a dramatic about-face for a company culture that once wore its contempt for antitrust law and theory on its sleeve. No longer the Goliath it once was—in large part because of the ascendance of companies like Google, Facebook, and Apple made possible by a settlement Microsoft signed—Microsoft was now comfortable supporting the Davids of the tech industry.
The August filing also represented a major reversal of another sort. In the mid to late 1990s when the events leading to the antitrust suit were playing out, Apple was on life support. Microsoft knew this, and according to the government suit, the company used the maker of Macs as a pawn in a bid to blunt the threat Navigator and Java posed to the Windows monopoly. Now, Apple represents the Goliath Microsoft was helping to slay.
All of this got me thinking about the one of the most memorable parts of my coverage of Microsoft antitrust trial—the videotaped deposition of Bill Gates, the companys cofounder and at the time its CEO and chairman. At its most basic level, the deposition underscored the utter contempt he had for an action he believed impinged the ability of his company—and others to follow, he warned—to design products and conduct business as they saw fit.
The strategy during the three-day deposition was classic Microsoft. Obstruct. Paint the government as out-of-touch policy wonks who had no idea how tech and real markets worked. And above all, deny even the most basic of premises in the governments case. The plan from Gates army of lawyers and PR handlers seemed to be to wield his image as a software wunderkind who dropped out of Harvard to bootstrap his company and went on to become the worlds richest man. Team Gates planned to use that same domineering force of will to beat back government lawyers.
A spectacular failure
By day 2, it became clear that strategy was failing spectacularly. As New Yorker writer Ken Auletta once noted, Gates had never in his life groveled for a job or suffered many of the indignities most of us experience on a regular basis. He regularly berated reporters for asking what hed say were stupid questions. Publicly lauded as the wise sage, consummate businessman, and industry visionary, Gates was accustomed to being treated with obsequious deference from all but a small number of peers. As such, he had little or no experience tolerating—let alone encountering—dissent, criticism, or challenges to his authority.
The lack of experience played right into the governments hand. Instead of portraying a leader in control of his domain and confident in his case and his companys legal and ethical righteousness, the courtroom videos showed a side of Gates that had never been on public display before. He was petulant, petty, flustered, and dour. He was ineffectual. He was, in a word, beaten.
During three days of intense questioning, Gates often feigned ignorance of his own companys policies and actions. He parsed everyday words or phrases such as “concern,” “support,” and “piss on.” Gates seemed to use the strategy to evade tough questions about whether his company abused its entrenched Windows franchise to kill off emerging competitors, such as Navigator and Java. To the surprise of him and his many attorneys and image handlers, Gates came off as argumentative, petty, and someone badly losing ground to a more formidable rival.
One example came in this exchange with David Boies, the private attorney hired by the Justice Department:
Boies: What non-Microsoft browsers were you concerned about in January of 1996?
Gates: I dont know what you mean “concerned.”
Boies: What is it about the word “concerned” that you dont understand?
Gates: Im not sure what you mean by it.
Boies: Is—
Gates: Is there a document where I use that term?
Boies: Is the term “concerned” a term that youre familiar with in the English language?
Gates: Yes.
Boies: Does it have a meaning that youre familiar with?
Gates: Yes.
Not particularly responsive
Justice Department lawyers played portions of the deposition during opening arguments and then periodically during as the trial progressed. Gates' attorneys were visibly vexed. Sitting in the gallery of the federal court room in Washington, DC, reporters broke into laughter more than once. Some of them had spent entire careers listening to Gates regularly launch verbal broadsides or wage one-sided arguments. For the first time, the tables were turned.
At one point, Thomas Penfield Jackson, the judge hearing the case, chuckled, too. When Microsoft lawyers argued during a closed-door session that the deposition was turning into a side show and government lawyers should be barred from showing any more segments during the trial, the judge denied the motion, saying: "If anything, I think your problem is with your witness, not with the way in which his testimony is being presented." Jackson continued:
I think it's evident to every spectator that, for whatever reasons, in many respects Mr. Gates has not been particularly responsive to his deposition interrogation. Everybody at your table has reflected skepticism as the testimony is presented.
Not long afterward, Gates appeared before reporters in a video news conference in Washington and told them Boies was "out to destroy Microsoft."
Greatest hits
Ive compiled some of the videotape segments that captured some of the more memorable deposition moments. Narrowing more than a dozen hours of video down to a handful of clips was challenging. In fairness to Gates, I mainly chose exchanges that showed him at his worst.
The first two examples, taped just before and just after a lunch break on August 28, 1998, are telling for Gates evasion and belligerence as he parses industry standard words such as “API”—short for application programming interface—not to mention everyday words such as “support” and “concern.”
During one of these exchanges, Boies asked about the terms for Microsoft giving Intuit an icon on the Active Desktop—the term for the Windows 98 home screen—that would allow users instant access to the tax preparation site.
Intuit CEO William Harriss office had already told government lawyers that Microsoft conditioned the placement on the bundling of IE with Intuit products and on not promoting Netscape on Intuit's websites or allowing Intuit's website customers to access Netscape's products or services.
The legal significance of such a policy was that Microsoft was using the monopoly power of Windows to promote IE, in violation of antitrust laws. Here, Gates tries to deflect questions about whether Will Poole, Microsofts senior director of business development, ever required Intuit to give preferential treatment to IE and less favorable treatment to Navigator.
Degrading Netscape
In the months following the deposition, Gates reluctance to answer became clear. In February 1999, Justice Department attorneys called Poole as a witness and obtained his testimony that Microsoft routinely required companies that wanted top Active Desktop billing to create Web content that gave a “degradation in appearance” when viewed with non-IE browsers. Poole went on to say that Microsofts deal with Intuit required the latter to develop “some differentiated content” on its website with “acceptable degradation when used with other browsers.”
Gates' exchange with Boies starts to turn testy around 1:41:00 (or 11:48 am as noted in the video itself) after Gates repeatedly asks for a definition of the word “support.”
Another tense moment starts around 9:23 (deposition clock time August 28, 12:47pm) in this segment as the topic turns to Java and whether Microsoft set out to kill its “write-once-run-anywhere” promise by creating a version that wasnt compatible with Suns. Boies presents Gates with an email from Ben Slivka, the Microsoft manager responsible for executing the Java strategy. The email notes that Gates recently “had a lot of pretty pointed questions about Java,” one of which was, “How do we wrest control of Java away from Sun?”
For more than six minutes, Gates is unable to concede even the most basic of facts. That Slivka is working on behalf of Microsoft to forge its Java strategy, that Gates even received the email. Then Gates uses a non-denial denial when asked if Slivka was accurate in saying one of Gates questions involved Microsoft “wresting” control of Java from Sun.
Shortly afterward, Gates takes a similar approach when asked about an email, with the subject “Java schism,” that Gates received from Microsoft VP Paul Maritz. The stalling lasts more than six minutes.
Things come to a head at 21:41 when Gates parses the words “proprietary API” and debates Boies on the semantics of the phrase. Boies finally snaps.
Boies: Mr. Gates, is the term proprietary API a term that is commonly used in your business?
Gates: Let me give you …
Boies: all Im trying to do is …
Gates: … the common meanings that thoseRead More – Source
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