Deposition of Bill Gates
August 28, 1998, Part B, Page 4
On Wednesday, April 28, 1999, the official transcript of the
1 "A From time to time we'd 2 have general discussions with Intel 3 about things going on in the 4 industry. And I'm sure our views of 5 the Java runtime competition may have 6 come up in some of those 7 discussions.") 8 Q BY MR. BOIES: In those discussions, 9 did you or others from Microsoft express concern 10 about Java and Java runtime's popularity to Intel 11 representatives? 12 A I think it's likely in those general 13 discussions. We talked about some of the 14 opportunities and competitive things going on 15 including our view of what was going on in Java 16 runtime. 17 Q Did you tell representatives of Intel 18 or, to your knowledge, anyone from Microsoft tell 19 representatives of Intel that in Microsoft's opinion 20 the wide distribution of Java and Java runtimes were 21 incompatible with interests of both Intel and 22 Microsoft? 23 A Actually, there -- there's one aspect 24 of Java that could have an effect on Intel and would 25 have no effect on Microsoft. So it's completely 482 1 orthogonal. And I pointed out to them what that was. 2 And so I did think there was one thing they ought to 3 think about in terms of where the world of software 4 development was going. But it wasn't an issue that 5 related to Microsoft. 6 Q Irrespective of what you said about 7 that particular issue, did you or others from 8 Microsoft tell Intel in words or in substance that is 9 as a general matter, a general conclusion, the 10 popularity of Java and Java runtimes was not in your 11 joint interest? And joint interest, I mean Microsoft 12 and Intel. 13 A No. There was nothing about it that 14 related to any joint interest. There was one thing 15 about it that related to some of Intel's interests 16 and there were other things about it that related to 17 some of Microsoft's interests. But there's no 18 overlap between those two. 19 Q Let me put the question this way: Did 20 you or, to your knowledge, others from Microsoft tell 21 Intel that for whatever reasons you believed that the 22 widespread distribution of Java and Java runtimes was 23 inconsistent with both interests of Intel and 24 interests of Microsoft? 25 A Well, it's like you're trying to 483 1 rephrase what I said in a more inaccurate way. I 2 told you there's an aspect of it that I thought they 3 should think about that related to them only, that's 4 the byte code piece. And then there's an aspect of 5 it that relates to us only. So there's no end there, 6 there's just a piece that might have been of interest 7 to them that I articulated, and then there's the part 8 that relates strictly to us. 9 Q Let me take it in two pieces. Did you 10 tell Intel representatives that you believed that 11 there were reasons why the widespread distribution of 12 Java and Java runtimes were not in Intel's interests? 13 A Not in that general sense. I pointed 14 out the very specific aspect of it, the byte code 15 aspect, that I thought they ought to think about that 16 had no effect on us. 17 Q Did you tell Intel representatives that 18 there were things about the wide distribution of Java 19 and Java runtimes that Microsoft believed was not in 20 Microsoft's interest? 21 A It's likely that in the general 22 discussion the notion of some of the new competitive 23 activities including the Java runtime issues would 24 have come up in some discussions with Intel but 25 not -- not related to anything they were doing. 484 1 Q Did you ask Intel to keep you apprised 2 of what software work Intel was doing? 3 A I think I made that request in vein on 4 several occasions, nothing ever came of it. 5 Q Is it your testimony that they refused 6 to keep you apprised of the software work they were 7 doing? 8 A No. I just said to them that if they 9 would -- whatever software work they were doing that 10 was intended to help Windows, they should talk to us 11 about it early on if they wanted to have the highest 12 probability that it would, in fact, achieve that 13 goal. 14 And unfortunately, we never achieved 15 that result; that is, they would do things related to 16 Windows that without talking to us in advance, and 17 then once they had done the work, there would be some 18 incompatibilities between what they had done and 19 Windows itself. 20 Q When is the last time that you asked 21 Intel to keep you apprised of what software work they 22 were doing? 23 A I'm not sure. 24 Q Approximately when? 25 A I don't know. 485 1 Q Was it within the last year? 2 A I don't know. 3 Q Was it within the last two years? 4 A I honestly don't know. 5 Q Was it within the last three years? 6 A There's probably one instance where I 7 asked them to tell us about things they were doing 8 related to Windows. 9 Q Did you or others, to your knowledge, 10 from Microsoft tell Intel that if Intel began to 11 compete with Microsoft, Microsoft would be forced to 12 begin to compete with Intel? 13 A No. 14 Q Not at all, sir; never said that in 15 words or in substance? 16 A No. 17 Q To your knowledge did anyone else from 18 Microsoft ever say that? 19 A I'm not aware of anybody saying that. 20 Q If anybody had said that, would you 21 consider that to be inconsistent with company policy? 22 MR. HEINER: Objection. 23 THE WITNESS: I'm confused. Intel and 24 Microsoft are not in the same businesses, so there's 25 no policy about one of our people suggesting that 486 1 we're going to go into the chip business. 2 Q BY MR. BOIES: Was it part of what you 3 wanted to accomplish, Mr. Gates, to be to keep Intel 4 and Microsoft in separate businesses? 5 A No. 6 Q Did you ever take any action intended 7 to accomplish that? 8 A No. 9 Q Did you or, to your knowledge, anyone 10 from Microsoft ever tell people at Intel that 11 Microsoft would hold up support for Intel's 12 microprocessors if Intel didn't cooperate with 13 Microsoft in areas that Microsoft wanted Intel's 14 cooperation in? 15 A When we saw Intel doing the low quality 16 work that was creating incompatibilities in Windows 17 that served absolutely no Intel goal, we suggested to 18 Intel that that should change. And it became 19 frustrating to us because it was a long period of 20 time where they kept doing work that we thought, 21 although it was intended to be positive in the 22 Windows environment, it was actually negative. And 23 we did point out the irony of how while we seemed to 24 communicate with them on microprocessor issues and 25 yet they seemed on the areas where they were trying 487 1 to enhance Windows that the communication worked very 2 poorly. 3 Q Did you or others on behalf of 4 Microsoft tell Intel that Microsoft would hold up 5 support for Intel's microprocessors if Intel did not 6 cooperate with Microsoft? 7 A No. 8 Q No one ever told Intel that, to your 9 knowledge? 10 A That's right. 11 Q Let me see if I can refresh your 12 recollection. 13 Did you or anyone from Microsoft ever 14 tell Intel representatives that Microsoft would hold 15 up support for Intel's microprocessors if Intel 16 didn't cooperate with Microsoft on the Internet? 17 A No. 18 Q Did you or anyone from Microsoft ever 19 tell representatives of Intel that Intel would not 20 cooperate -- that if Intel would not cooperate with 21 Microsoft on communications programs, Microsoft would 22 hold up support for Intel's microprocessors? 23 A No. 24 Q Did you or to your knowledge anyone 25 from Microsoft ever tell Intel that you wanted Intel 488 1 to reduce its support of Netscape? 2 MR. HEINER: Objection. 3 THE WITNESS: It's very likely that our 4 sales force that calls on Intel as a software 5 customer talked to them about their web site and 6 their browsers. And they may have tried to convince 7 them to use our browser in terms of their internal 8 efforts. It's kind of a knit, but I think it's 9 possible. 10 Q Did you, Mr. Gates, ever yourself try 11 to get Intel to reduce its support of Netscape? 12 A I'm not aware of any work that Intel 13 did in supporting Netscape. They may have used their 14 browser internally or one of their server things, but 15 that's -- that's not really support. So I'm not sure 16 of any support they were giving to Netscape. 17 Q You may mean that to answer my 18 question, but I want to be clear. 19 It is your testimony that you're not 20 aware of any instance where you asked anybody at 21 Intel to reduce the support that Intel was providing 22 to Netscape; is that your testimony? 23 A No. I may have asked -- I may -- and I 24 don't remember it -- but I may have talked to them 25 about their internal browser use. I don't think so, 489 1 but I may have. And I may have talked to them about 2 their web servers and what they were using, but I 3 don't think so. 4 MR. HEINER: We would like to take one 5 last break here at some point, and we'll go through 6 until 4:00. 7 MR. BOIES: Okay. 8 MR. HEINER: Okay. 9 THE VIDEOGRAPHER: The time is 3:26. 10 We're going off the record. 11 (Recess.) 12 THE VIDEOGRAPHER: The time is 3:36. 13 We're going back on the record. 14 Q BY MR. BOIES: Mr. Gates, you're 15 familiar with a company called RealNetworks, are you 16 not? 17 A Yes. 18 Q Did you ever have any discussions with 19 any representative of RealNetworks concerning what 20 products RealNetworks should or should not offer or 21 distribute? 22 A No. 23 Q Microsoft signed two contracts with 24 RealNetworks, did it not, sir? 25 A I have no idea. I thought it was one. 490 1 Q RealNetworks was previously called 2 Progressive Networks; correct, sir? 3 A Right. 4 Q In the contract or contracts, if there 5 was more than one, between Microsoft and 6 RealNetworks, was there any restriction on what 7 services RealNetworks could provide to competitors of 8 Microsoft? 9 A I've never looked at those contracts. 10 Q Did you participate at all in those 11 contracts either the negotiation of those contracts 12 or discussions concerning those contracts prior to 13 the time they were entered into? 14 A I knew that Muglia and Maritz were 15 talking with Progressive about some kind of deal, but 16 I didn't know what was in the deal. 17 Q Did you know anything about what was in 18 the deal? 19 A I knew there was an investment piece. 20 I knew there was some code licensing in it. That's 21 about all. 22 Q At the time that Microsoft was 23 negotiating the contract or contracts with 24 RealNetworks -- and I'll refer to it as RealNetworks 25 even though at the time it was referred to as 491 1 Progressive Networks -- did you consider that company 2 to be a competitor of Microsoft? 3 A Not -- I think I was confused about 4 what RealNetworks -- what their plans were, and I 5 wasn't sure if they were a competitor or not. 6 Q Was there a time when you did become 7 convinced that they were a competitor? 8 A Yes. 9 Q When was that? 10 A When Rob Glaser appeared in Washington, 11 D.C. 12 Q To testify before a Congressional 13 committee? 14 A Senate, yes. 15 Q What led you to conclude from 16 Mr. Glaser's testimony that RealNetworks was a 17 competitor of Microsoft? 18 A It was nothing in his testimony. 19 Q Why did you become convinced at the 20 time of his testimony that RealNetworks was a 21 competitor of Microsoft? 22 A Well, because he went out of his way to 23 lie about us, I sort of thought, "Hum, he must be a 24 competitor." 25 Q When you say he went out of his way to 492 1 lie about you, when was that? 2 A That was at the press interview 3 surrounding the testimony -- maybe the testimony 4 itself, I'm not sure. I've never seen a transcript. 5 Q Did you ever personally have a 6 conversation with Mr. Glaser about his business? 7 A A long, long time ago when Rob was just 8 getting started I think there was one meeting that I 9 had with Rob. I haven't met with him since then. 10 Q Was that meeting before or after the 11 contract between RealNetworks and Microsoft that you 12 say that you know about? 13 A If you mean the contract where we 14 invested in Progressive, it was years before it and 15 not at all related to it. 16 Q When was the contract in which you 17 invested in Progressive Networks or RealNetworks? 18 A I'm not sure. I'd guess it's about a 19 year ago. 20 Q Did you have a conversation with 21 Mr. Glaser a few days after that agreement was 22 signed? 23 A Now that you ask me that, maybe I did. 24 Maybe I did. I think we may have had a short 25 meeting. 493 1 Q And did you in that meeting tell 2 Mr. Glaser in words or in substance how you thought 3 he should limit his business? 4 A Absolutely not. 5 Q Not in any way, sir? 6 A Not in any way. 7 Q Did you tell him he ought to get out of 8 the base streaming media platform business? 9 A No. 10 Q Did anyone ever tell you that 11 Mr. Glaser had said he would get out of the base 12 streaming media platform business? 13 A No. 14 Q Did Mr. Maritz ever tell you that 15 Mr. Glaser's stated plan was that he would get out of 16 the base streaming media platform business? 17 A As far as I know, we didn't know what 18 Rob's plans were. 19 Q Did you ever try to find out what those 20 plans were, sir? 21 A No. 22 Q Were those plans important to you? 23 A To me personally? No. 24 Q Were they important to Microsoft? 25 A On a relative basis, I'd say no. 494 1 Q Well, I suppose on a relative basis a 2 business as big as Microsoft, I don't know what would 3 be important, but -- 4 A I can tell you. 5 Q -- but on a non-relative basis? 6 A I can tell -- 7 Q Yes. Tell me what would be important 8 to Microsoft on a relative basis. 9 A Improvements in Windows, improvements 10 in Office, breakthroughs in research, breakthroughs 11 in Back Office. 12 Q How about browsers? On a relative 13 basis would that be important -- was that important 14 to Microsoft? 15 A To the degree it relates to Windows, 16 yes. 17 Q What about Java or Java runtime? Was 18 that on a relative basis important to Microsoft? 19 A To the degree it related to Windows, 20 yes. 21 Q Let me ask you to look at a document 22 that we have marked Government Exhibit 379. This 23 purports to be an e-mail from Paul Maritz. You are 24 not shown on this as receiving a copy. The portion 25 I'm particularly interested in is the last full 495 1 paragraph that says, quote, 2 "Rob's stated plan is that 3 he will get out of the base streaming 4 media platform business, and focus on 5 higher level solutions, hosting, and 6 content aggregation, and says that 7 his goal is now to get us to get his 8 base technology as widespread as 9 possible," close quote. 10 Do you see that? 11 A Uh-huh. 12 (The document referred to was marked as 13 Government Exhibit 379 for identification and is 14 attached hereto.) 15 Q BY MR. BOIES: Did anyone ever tell 16 you, as Mr. Maritz writes here, that Mr. Glaser had 17 said that his stated plan was that he would get out 18 of the base streaming media platform business? 19 A No. 20 Q Did you or, to your knowledge, anyone 21 from Microsoft ever tell Mr. Glaser that he should 22 get out of the base streaming media platform 23 business? 24 A No. 25 Q Okay. 496 1 You are aware, are you not, sir, that 2 one of the issues in this case is the extent to which 3 operating systems and browsers are or are not 4 separate products? 5 MR. HEINER: Objection. 6 Mischaracterizes the allegations of the complaint, I 7 believe. 8 MR. BOIES: Well, if the witness tells 9 me that he doesn't think that's an issue in the case, 10 he can so tell me. 11 THE WITNESS: I'm not a lawyer, so I 12 think it's very strange for me to opine on what's an 13 issue in the case. As far as I know, the issues in 14 the case are not -- are something that you decide, 15 and I don't claim to have any expertise at all. 16 Q BY MR. BOIES: And if you don't know, 17 that's okay. But one of the things that I want to 18 understand from you is whether your understanding, 19 which is important to my next line of questions, is 20 that the issue of whether or not browsers are or are 21 not a separate product from the operating system is 22 in this case. 23 MR. HEINER: Objection. What operating 24 system? What browsers? You referred to "the 25 operating system." 497 1 MR. BOIES: You want me to stop. All 2 right. I -- 3 MR. HEINER: No. I want you to ask the 4 question but with specific specificity. 5 MR. BOIES: I've asked the question. 6 If he says he doesn't understand this question, 7 again, we put it down and then it's there for people 8 to look at later. 9 MR. HEINER: That's fine. You can do 10 that. And I, as his counsel, can pose an objection. 11 MR. BOIES: Yeah. But you can't pose 12 questions to me particularly when you're trying to 13 get the witness out at 4:00. 14 MR. HEINER: I can. 15 MR. BOIES: Not questions to me. 16 Q Mr. Gates -- you can put in an 17 objection, I'm not trying to keep you from putting in 18 an objection. 19 Mr. Gates, do you understand that the 20 issue of whether or not browsers are a separate 21 product or are not a separate product from the 22 operating system is an issue in this case? 23 A I don't consider myself someone who 24 could say if that's an issue in this case or not. 25 Q Have you participated in any way in 498 1 trying to get Microsoft personnel to use language 2 that would suggest that browsers and operating 3 systems are not separate products? 4 A I have no idea what you mean by that. 5 Q Well, have you seen e-mails that urge 6 people within Microsoft not to talk about browsers as 7 if they were separate from the operating system? 8 A I don't recall seeing any such e-mail. 9 Q Are you aware of any anybody within 10 Microsoft who has asserted, either in an e-mail or 11 otherwise, that people ought to not talk about 12 browsers as if they were separate from the operating 13 system? 14 A I don't remember any such e-mail. 15 Q Has Microsoft tried to get companies to 16 agree to statements that Internet Explorer comprises 17 part of the operating system of Windows 95 and 18 Windows 98? 19 A I know it's a true statement, but I'm 20 not aware of us doing anything to try to get anyone 21 else to endorse the statement. 22 Q You're not aware of any effort by 23 Microsoft to get non-Microsoft companies to endorse 24 the statement that Internet Explorer comprises part 25 of the operating system of Windows; is that what 499 1 you're saying? 2 A I'm not aware of such efforts. 3 Q Do you know whether Microsoft has made 4 any efforts to include language like that in any of 5 its license agreements? 6 A No, I don't. 7 Q Do you know why Microsoft might do 8 that? 9 MR. HEINER: Objection. 10 THE WITNESS: I'm not sure. 11 Q BY MR. BOIES: Do you recognize that 12 OEMs have a need to acquire the Windows operating 13 system that Microsoft licenses? 14 A What do you mean by OEM? Is it a 15 tautology because of the way you're defining it? 16 Q Well, if you take IBM and Compaq and 17 Dell, Gateway and some other companies, those are 18 commonly referred to as OEMs or PC manufacturers; 19 correct, sir? 20 A No. The term "OEM" would be quite a 21 bit broader than that. OEMs used means original 22 equipment manufacturer. 23 Q I see. 24 And does OEM have a specialized meaning 25 in your business to refer to people that supply 500 1 personal computers? 2 A No. It usually means our licensees. 3 Q And do your licensees, in part, supply 4 personal computers, sir? 5 A Some of our licensees. 6 Q The licensees to whom you license 7 Windows are suppliers of personal computers, are they 8 not, sir? 9 A If you exclude Windows CE and depending 10 on how you talk about workstations and servers. 11 Q So that if we can get on common ground, 12 the licensees for Windows 95 and Windows 98 would be 13 companies that you would recognize as personal 14 computer manufacturers; is that correct? 15 A Yeah. Almost all the licensees of 16 Windows 95 and Windows 98 are personal computer 17 manufacturers. Some are not, but the overwhelming 18 majority are. 19 Confidential Material Redacted 20 Confidential Material Redacted 21 Confidential Material Redacted 22 Confidential Material Redacted 23 Confidential Material Redacted 24 Confidential Material Redacted 25 Confidential Material Redacted 501 1 Confidential Material Redacted 2 Confidential Material Redacted 3 Confidential Material Redacted 4 Confidential Material Redacted 5 Confidential Material Redacted 6 Confidential Material Redacted 7 Confidential Material Redacted 8 Confidential Material Redacted 9 Confidential Material Redacted 10 Confidential Material Redacted 11 Confidential Material Redacted 12 Confidential Material Redacted 13 Confidential Material Redacted 14 Confidential Material Redacted 15 Confidential Material Redacted 16 Confidential Material Redacted 17 Confidential Material Redacted 18 Confidential Material Redacted 19 Confidential Material Redacted 20 Confidential Material Redacted 21 Confidential Material Redacted 22 Confidential Material Redacted 23 Confidential Material Redacted 24 Confidential Material Redacted 25 Confidential Material Redacted 502 1 Confidential Material Redacted 2 Confidential Material Redacted 3 Confidential Material Redacted 4 Confidential Material Redacted 5 Confidential Material Redacted 6 Confidential Material Redacted 7 Confidential Material Redacted 8 Confidential Material Redacted 9 Confidential Material Redacted 10 Confidential Material Redacted 11 Confidential Material Redacted 12 Confidential Material Redacted 13 Confidential Material Redacted 14 Confidential Material Redacted 15 Confidential Material Redacted 16 Confidential Material Redacted 17 Confidential Material Redacted 18 Confidential Material Redacted 19 Confidential Material Redacted 20 Confidential Material Redacted 21 Confidential Material Redacted 22 Confidential Material Redacted 23 Confidential Material Redacted 24 Confidential Material Redacted 25 Confidential Material Redacted 503 1 Confidential Material Redacted 2 Confidential Material Redacted 3 Confidential Material Redacted 4 Confidential Material Redacted 5 Confidential Material Redacted 6 Confidential Material Redacted 7 Confidential Material Redacted 8 Confidential Material Redacted 9 Confidential Material Redacted 10 Confidential Material Redacted 11 Confidential Material Redacted 12 Confidential Material Redacted 13 Confidential Material Redacted 14 Confidential Material Redacted 15 Confidential Material Redacted 16 Confidential Material Redacted 17 Confidential Material Redacted 18 Confidential Material Redacted 19 Confidential Material Redacted 20 Confidential Material Redacted 21 Confidential Material Redacted 22 Confidential Material Redacted 23 Confidential Material Redacted 24 Confidential Material Redacted 25 Confidential Material Redacted 504 1 Confidential Material Redacted 2 Confidential Material Redacted 3 Confidential Material Redacted 4 Confidential Material Redacted 5 Confidential Material Redacted 6 Confidential Material Redacted 7 Confidential Material Redacted 8 Confidential Material Redacted 9 Confidential Material Redacted 10 Confidential Material Redacted 11 Confidential Material Redacted 12 Confidential Material Redacted 13 Confidential Material Redacted 14 Confidential Material Redacted 15 Confidential Material Redacted 16 Confidential Material Redacted 17 Confidential Material Redacted 18 Confidential Material Redacted 19 MR. HEINER: Okay. We'll step out and 20 then come back in and talk about next steps. 21 MR. BOIES: Okay. 22 THE VIDEOGRAPHER: Okay. The time is 23 4:03 P.M. We're going off the record. 24 25 * * * 505 1 2 I hereby declare, under penalty of 3 perjury, that the foregoing answers are true and 4 correct to the best of my knowledge and belief. 5 EXECUTED AT _________________, WASHINGTON, 6 this ______day of _________________, 1998. 7 8 _________________________ 9 William Gates 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 507 Released Pursuant to 15 U.S.C. §30
Continued on September 2, Page 1.
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