U.S. vs. Microsoft
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Deposition of Bill Gates
August 28, 1998, Part B, Page 4

On Wednesday, April 28, 1999, the official transcript of the
deposition of Microsoft Chairman Bill Gates was released.

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. 
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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
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		Released Pursuant to 15 U.S.C. 30

Continued on September 2, Page 1.

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