IBM Exec: An Offer We Refused
Microsoft offered IBM a sweetheart deal in 1997 on its Windows operating system, provided the computer maker would agree not to ship Netscape's browser and to drop other software that competed with Microsoft, an IBM manager testified Tuesday.
Garry Norris, an IBM manager who led negotiations for Windows licensing deals from 1995 to 1997, took the witness stand in the landmark antitrust trial for a second day Tuesday. In questioning by Justice Department attorney Philip Malone, Norris provided further details that the government contends demonstrate Microsoft's willingness to use its Windows operating system monopoly to bully computer makers.
Norris is the second government rebuttal witness to be called in the second phase of the antitrust trial. In a sweeping joint federal and state lawsuit, the government has charged Microsoft with illegally maintaining its monopoly in operating systems and with using that monopoly to try to dominate other markets.
Although IBM (IBM) never buckled to the pressure, it believes it has paid significantly more for Windows than other major computer makers over the years and has also been shut out of technical and marketing agreements with Microsoft (MSFT) that have cost it sales, Norris testified.
In March 1997, Microsoft executive Bengt Akerlind told Norris that IBM could receive a break on its Windows licensing fees if it agreed not to load Netscape's (AOL) Navigator browser on its personal computers.
"Bengt was very specific, he said, 'No Netscape,' " Norris testified. Malone introduced handwritten notes from the meeting taken by Norris, in which he wrote that Microsoft wanted IBM to exclusively promote Microsoft's Internet Explorer browser on its Active Desktop, a highly visible spot on the computer screen.
IBM would also have to adopt a "neutral" software platform, Norris said. Microsoft defined the neutral system as one that carried Internet Explorer, as well as a host of other Microsoft software, including Word 97, the Works 4.0 spreadsheet program and the Encarta 97 electronic encyclopedia.
Norris recounted Tuesday how Microsoft executives had said Microsoft Chairman Bill Gates was angered by IBM's earlier decision to load World Book's electronic encyclopedia on IBM computers, rather than Microsoft's Encarta.
In Monday's testimony, Norris described how negotiations with Microsoft for a Windows 95 licensing deal came to a halt just days after IBM announced its intention to pre-load its Lotus SmartSuite office software on its own computers.
Microsoft contends that there was nothing illegal about any of its negotiations with IBM. Microsoft spokesman Mark Murray said outside of court that Microsoft offered Windows to IBM at a fair price.
Written By William L. Watts, CBS MarketWatch
CBS MarketWatch Garry Norris, an IBM manager who led negotiations for Windows licensing deals from 1995 to 1997, took the witness stand in the landmark antitrust trial for a second day Tuesday. In questioning by Justice Department attorney Philip Malone, Norris provided further details that the government contends demonstrate Microsoft's willingness to use its Windows operating system monopoly to bully computer makers.
Norris is the second government rebuttal witness to be called in the second phase of the antitrust trial. In a sweeping joint federal and state lawsuit, the government has charged Microsoft with illegally maintaining its monopoly in operating systems and with using that monopoly to try to dominate other markets.
Although IBM (IBM) never buckled to the pressure, it believes it has paid significantly more for Windows than other major computer makers over the years and has also been shut out of technical and marketing agreements with Microsoft (MSFT) that have cost it sales, Norris testified.
In March 1997, Microsoft executive Bengt Akerlind told Norris that IBM could receive a break on its Windows licensing fees if it agreed not to load Netscape's (AOL) Navigator browser on its personal computers.
"Bengt was very specific, he said, 'No Netscape,' " Norris testified. Malone introduced handwritten notes from the meeting taken by Norris, in which he wrote that Microsoft wanted IBM to exclusively promote Microsoft's Internet Explorer browser on its Active Desktop, a highly visible spot on the computer screen.
IBM would also have to adopt a "neutral" software platform, Norris said. Microsoft defined the neutral system as one that carried Internet Explorer, as well as a host of other Microsoft software, including Word 97, the Works 4.0 spreadsheet program and the Encarta 97 electronic encyclopedia.
Norris recounted Tuesday how Microsoft executives had said Microsoft Chairman Bill Gates was angered by IBM's earlier decision to load World Book's electronic encyclopedia on IBM computers, rather than Microsoft's Encarta.
In Monday's testimony, Norris described how negotiations with Microsoft for a Windows 95 licensing deal came to a halt just days after IBM announced its intention to pre-load its Lotus SmartSuite office software on its own computers.
Microsoft contends that there was nothing illegal about any of its negotiations with IBM. Microsoft spokesman Mark Murray said outside of court that Microsoft offered Windows to IBM at a fair price.
Written By William L. Watts, CBS MarketWatch
