U.S. vs. Microsoft
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Deposition of Bill Gates
September 2, 1998, Page 2

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

	1		Q.	Would it be, in your view, Mr. Gates,
	2	if you were using those terms, would important be the
	3	same as very very important?
	4		A.	Not identical.
	5		Q.	What would be the difference?
	6		A.	The two very's.
	7		Q.	And what significance in terms of
	8	substance would those two very's have?
	9		A.	A speaker's tendency towards hyperbole.
10		Q.	Other than your tendency, if you have
11	one, to hyperbole, would there be anything different
12	that you would be communicating to people if you were
13	to say browser share is an important goal or browser
14	share is a very very important goal?
15		A.	You'd have to look at the context to
16	see.
17		Q.	As you sit here now, what you've told
18	me is that you recall communicating that browser
19	share was an important goal, but not a very very
20	important goal, and all I'm trying to do is find out
21	whether you draw a distinction in terms of the
22	substance of those communications?  
23		A.	And I said, it would depend on the
24	context.
25		Q.	Let me ask you to look at at least one
	1	context and that would be Exhibit 358 that we marked
	2	during your deposition last week.  And it is in the
	3	stack of exhibits that you have in front of you.  
	4			Did you write Exhibit 358, Mr. Gates,
	5	on or about January 5, 1996?
	6		A.	I don't remember doing so specifically,
	7	but it appears that I did.
	8		Q.	And the first line of this is, "Winning
	9	Internet browser share is a very very important goal
10	for us."  
11			Do you see that?
12		A.	I do.
13		Q.	Do you remember writing that, sir?
14		A.	Not specifically.
15		Q.	Now, when you were referring there to
16	Internet browser share, what were the companies who
17	were included in that?  
18		A.	There's no companies included in that.
19		Q.	Well, if you're winning browser share,
20	that must mean that some other company is producing
21	browsers and you're comparing your share of browsers
22	with somebody else's share of browsers; is that not
23	so, sir?
24		A.	You asked me if there are any companies
25	included in that and now -- I'm very confused about
	1	what you're asking.
	2		Q.	All right, sir, let me see if I can try
	3	to clarify.  You say here "Winning Internet browser
	4	share is a very very important goal for us."  What
	5	companies were supplying browsers whose share you
	6	were talking about?
	7		A.	It doesn't appear I'm talking about any
	8	other companies in that sentence.
	9		Q.	Well, sir, is a market share something
10	that is compiled only for one company?  I understand
11	if a company has a monopoly, that may be so, but in a
12	usual situation where a company does not have a
13	monopoly, share ordinarily implies comparing how much
14	of a product one company has with how much of a
15	product another company has; correct?
16		A.	Yes.
17		Q.	Now, when you were talking about
18	Internet browser share here, what companies were you
19	talking about?
20		A.	You're trying -- you seem to be
21	suggesting that just because share involves comparing
22	multiple companies, that when I wrote that sentence,
23	I was talking about other companies.  It doesn't
24	appear that I'm talking about other companies in that
25	sentence.  I've really read it very carefully and I
	1	don't notice any other companies in there.
	2		Q.	Oh, you mean you don't see any other
	3	company mentioned in that sentence; is that what
	4	you're saying?
	5		A.	The sentence doesn't appear to directly
	6	or indirectly refer to any other companies.
	7		Q.	When you refer to an Internet browser
	8	share here, sir, what is the share of?
	9		A.	Browser usage.
10		Q.	Of course, you don't say "browser
11	usage" here, do you, sir?
12		A.	No, it says "share."
13		Q.	Now, let's say that you meant browser
14	usage because that's what your testimony is.  What
15	browser usage were you talking about in terms of what
16	your share of browser usage was?  What browsers?
17		A.	I'm not getting your question.  Are you
18	trying to ask what I was thinking when I wrote this
19	sentence?  
20		Q.	Let me begin with that.  What were you
21	thinking when you --
22		A.	I don't remember specifically writing
23	this sentence.
24		Q.	Does that mean you can't answer what
25	you were thinking when you wrote the sentence?
	1		A.	That's correct.
	2		Q.	So since you don't have an answer to
	3	that question, let me put a different question.  
	4		A.	I have an answer.  The answer is I
	5	don't remember.
	6		Q.	You don't remember what you meant.  Let
	7	me try to ask you --
	8		A.	I don't remember what I was thinking.
	9		Q.	Is there a difference between
10	remembering what you were thinking and remembering
11	what you meant?
12		A.	If the question is what I meant when I
13	wrote it, no.
14		Q.	So you don't remember what you were
15	thinking when you wrote it and you don't remember
16	what you meant when you wrote it; is that fair?
17		A.	As well as not remember writing it.
18		Q.	Okay.  Now, let me go on to another
19	paragraph and see whether you remember writing that
20	or not.  And that is the second paragraph, which
21	reads, "Apparently a lot of OEMs are bundling
22	non-Microsoft browsers and coming up with offerings
23	together with Internet Service providers that get
24	displayed on their machines in a FAR" -- and you've
25	capitalized each of the letters in far -- "more
	1	prominent way than MSN or our Internet browser."
	2			Do you see that?
	3		A.	Uh-huh.
	4		Q.	Did you write that sentence, Mr. Gates?
	5		A.	I don't remember, but I have no reason
	6	to doubt that I did.
	7		Q.	Do you remember what you were thinking
	8	when you wrote that sentence or what you meant when
	9	you wrote that sentence?
10		A.	No.
11		Q.	Do you remember that in January, 1996,
12	a lot of OEMs were bundling non-Microsoft browsers?
13		A.	I'm not sure.
14		Q.	What were the non-Microsoft browsers
15	that you were concerned about in January of 1996?
16		A.	What's the question?  You're trying to
17	get me to recall what other browsers I was thinking
18	about when I wrote that sentence?
19		Q.	No, because you've told me that you
20	don't know what you were thinking about when you
21	wrote that sentence.
22		A.	Right.
23		Q.	What I'm trying to do is get you to
24	tell me what non-Microsoft browsers you were
25	concerned about in January of 1996.
	1		A.	If it had been only one, I probably
	2	would have used the name of it.  Instead I seem to be
	3	using the term non-Microsoft browsers.
	4		Q.	My question is what non-Microsoft
	5	browsers were you concerned about in January of 1996?
	6		A.	I'm sure -- what's the question?  Is 
	7	it -- are you asking me about when I wrote this
	8	e-mail or what are you asking me about?
	9		Q.	I'm asking you about January of 1996.
10		A.	That month?
11		Q.	Yes, sir.
12		A.	And what about it?
13		Q.	What non-Microsoft browsers were you
14	concerned about in January of 1996?
15		A.	I don't know what you mean "concerned."
16		Q.	What is it about the word "concerned"
17	that you don't understand?
18		A.	I'm not sure what you mean by it.
19		Q.	Is --
20		A.	Is there a document where I use that
21	term?
22		Q.	Is the term "concerned" a term that
23	you're familiar with in the English language?
24		A.	Yes.
25		Q.	Does it have a meaning that you're
	1	familiar with?
	2		A.	Yes.
	3		Q.	Using the word "concerned" consistent
	4	with the normal meaning that it has in the English
	5	language, what Microsoft -- or what non-Microsoft
	6	browsers were you concerned about in January of 1996?
	7		A.	Well, I think I would have been
	8	concerned about Internet Explorer, what was going on
	9	with it.  We would have been looking at other
10	browsers that were in use at the time.  Certainly
11	Navigator was one of those.  And I don't know which
12	browser AOL was using at the time, but it was another
13	browser.
14		Q.	What I'm asking, Mr. Gates, is what
15	other browsers or what non-Microsoft browsers were
16	you concerned about in January of 1996?  I'm not
17	asking what you were looking at, although that may be
18	part of the answer, and I don't mean to exclude it,
19	but what non-Microsoft browsers were you concerned
20	about in January of 1996?
21	       A.     Well, our concern was to provide the
22	best Internet support, among other things, in
23	Windows.  And in dealing with that concern, I'm sure
24	we looked at competitive products, including the ones
25	I mentioned.
	1		Q.	Let me try to use your words and see if
	2	we can move this along.  What competitive products
	3	did you look at in January of 1996 in terms of
	4	browsers?
	5		A.	I don't remember looking at any
	6	specific products during that month.
	7		Q.	Were there specific competitive
	8	products that in January of 1996 you wanted to
	9	increase Microsoft's share with respect to those
10	products?
11			MR. HEINER:  Objection.
12		Q.	BY MR. BOIES:  Do you understand the
13	question, Mr. Gates?
14		A.	I'm pausing to see if I can understand
15	it.
16		Q.	If you don't understand it, I'd be
17	happy to rephrase it.
18		A.	Go ahead and rephrase it.  I probably
19	could have understood it if I thought about it, but
20	go ahead.
21		Q.	In January, 1996, you were aware that
22	there were non-Microsoft browsers that were being
23	marketed; is that correct?
24		A.	I can't really confine it to that
25	month, but I'm sure in that time period I was aware
	1	of other browsers being out.
	2		Q.	And were those non-Microsoft browsers,
	3	or at least some of them, being marketed in
	4	competition with Microsoft's browser?
	5		A.	Users were making choices about which
	6	browser to select.
	7		Q.	Is the term "competition" a term that
	8	you're familiar with, Mr. Gates?
	9		A.	Yes.
10		Q.	And does it have a meaning in the
11	English language that you're familiar with?
12		A.	Any lack of understanding of the
13	question doesn't stem from the use of that word.
14		Q.	And you understand what is meant by
15	non-Microsoft browsers, do you not, sir?
16		A.	No.  
17		Q.	You don't?  Is that what you're telling
18	me?  You don't understand what that means?
19		A.	You'll have to be more specific.  
20	What --
21		Q.	Do you understand what is meant by
22	non-Microsoft browsers?
23		A.	In the right context, I'd understand
24	that.
25		Q.	Is the term non-Microsoft browser a
	1	term that you think has a reasonably common and
	2	understandable meaning in the industry?
	3		A.	Yes.  It's only the scope of what you'd
	4	include in it that would vary according to the
	5	context.
	6		Q.	Okay.  That is, in some contexts you'd
	7	include more and in some contexts you'd include less?
	8		A.	That's right.
	9		Q.	When you refer to non-Microsoft
10	browsers generally, are there particular browsers
11	that you have in mind?
12		A.	There are many that I would include in
13	that.  And as I said, it would be broader depending
14	on the context.
15		Q.	Do all of the non-Microsoft browsers
16	that you're aware of compete with Internet Explorer?
17		A.	In the sense that users select which
18	browsers they want to use, yes.
19		Q.	Let's focus on January of 1996.  What
20	were the non-Microsoft browsers that, in your view,
21	were competing with Internet Explorer in January of
22	1996?
23		A.	Well, users could choose from a number
24	of browsers, including the original Mosaic browser,
25	the Netscape Navigator, and I don't know what version
	1	they had out at the time.  The AOL browser.  And some
	2	others that were in the market.
	3		Q.	And using the term as you used the
	4	term, were all of those three browsers competing with
	5	Internet Explorer in January of 1996?
	6		A.	In the sense that users could choose to
	7	use them or use Internet Explorer, yes.
	8		Q.	I want to use it the way you use it,
	9	not the way somebody else might use it, Mr. Gates. 
10	What I want to know is in January, 1996, did you
11	consider Mosaic, Navigator and AOL's browser as all
12	competing with Internet Explorer?
13		A.	In the sense that users could select
14	one of those others to choose, yes.
15		Q.	Is that the only sense that you use the
16	term competition?
17		A.	No.
18		Q.	What I want to do is I want to focus on
19	competition the way you use it in the ordinary
20	operation of your business.
21		A.	And one of the senses is whether people
22	choose to use our way of providing a feature or if
23	they choose to get additional software to provide
24	them with that feature.
25		Q.	And was that the choice that users were
	1	making between Internet Explorer and the AOL browser
	2	in January of 1996, Mr. Gates?
	3		A.	Users can choose between those two.
	4		Q.	Were they making that choice, 
	5	Mr. Gates, so far as you're aware?
	6		A.	Some were, yes.
	7		Q.	And some were choosing the AOL browser
	8	instead of Internet Explorer, that's your testimony?
	9		A.	Well, people can switch at any time and
10	they can intermix their usage.  Some people choose to
11	primarily use the AOL browser.
12		Q.	Instead of Internet Explorer is your
13	testimony?
14		A.	When I say primarily, that means it got
15	most of their usage share and it means nothing else
16	does.  Let's take somebody who exclusively would have
17	used the AOL browser.  I can't name anybody like
18	that, but I'm sure there were people like that.  That
19	would mean they weren't using the Internet Explorer
20	technologies in Windows.
21		Q.	And because of that, as you use the
22	term competition, you would consider that a
23	competitive alternative?  That's what you said; is
24	that correct?
25		A.	In terms of competing for usage share,
	1	yes.
	2		Q.	And what you've testified is that when
	3	you use browser share, you meant usage share;
	4	correct?
	5		A.	That's right.
	6		Q.	So that as you use the term browser
	7	share, it is your testimony that in January of 1996
	8	Microsoft was competing for browser share with
	9	Mosaic, Navigator and AOL's browser; correct?
10		A.	In the sense that users would choose to
11	use one of those in varying degrees, yes.
12		Q.	But in terms of what you meant by
13	browser share, that was what you considered to be
14	competition in January of 1996; correct?
15		A.	That we were competing to see who could
16	make the better browser that users would choose to
17	take advantage of, yes.
18		Q.	And you were competing with the
19	supplier of Mosaic and the supplier of Navigator and
20	the supplier of AOL's browser to do that; is that
21	your testimony?
22		A.	I know we were interested in making our
23	browser attractive so that we'd gain higher usage
24	share.
25		Q.	Higher usage share compared to --
	1		A.	All the other browsers, including
	2	particularly those browsers.
	3		Q.	Okay.  Now, in January of 1996, did you
	4	consider any one of those three browsers to be a
	5	stronger or more important competitor than any of the
	6	others?
	7		A.	It's hard for me to pin it down to
	8	January, 1996.  At some point we definitely thought
	9	of the Netscape browser as the number one in terms of
10	how our Windows browsing would be compared by users
11	and which they would select.
12		Q.	Have you finished your answer?
13		A.	Uh-huh.
14		Q.	When did you first consider Netscape's
15	browser to be your primary or most important
16	non-Microsoft browser with which Internet Explorer
17	was competing?
18		A.	I think by late 1995 we thought of
19	Navigator as competing both with -- well, competing
20	with Windows broadly, including the Internet
21	capabilities of Windows.
22		Q.	Prior to late 1995, did you think of
23	the Netscape browser as competing either broadly with
24	Windows or with Internet Explorer?
25		A.	No.  I think prior to that we were
	1	unclear about whether that was the case.
	2		Q.	Let me try to go back now to the first
	3	sentence in your memo of January 5, 1996 that has
	4	been marked as Exhibit 358 where it says, "Winning
	5	Internet browser share is a very very important goal
	6	for us."  Does the prior discussion that we've just
	7	had refresh your recollection that you would have
	8	been referring primarily there to the goal of gaining
	9	market share versus Netscape?
10		A.	You keep trying to read Netscape into
11	that sentence and I don't see how you can do that.
12		Q.	I just really want to get your
13	testimony, Mr. Gates.
14		A.	Okay.
15		Q.	And that is, when you wrote, "Winning
16	Internet browser share is a very very important goal
17	for us," in January, 1996, were you referring
18	primarily to gaining market share compared to
19	Netscape?
20		A.	I've testified I don't remember what I
21	was thinking when I wrote that sentence.
22		Q.	If you can't remember what you meant
23	when you wrote that sentence, do you at least
24	remember that in January, 1996, winning Internet
25	browser share was an important goal for Microsoft?
	1		A.	Yes.
	2		Q.	And with respect to the goal of winning
	3	Internet browser share in 1996, was that goal
	4	primarily to gain share compared to Netscape?
	5		A.	Not necessarily.
	6		Q.	When you talk about winning browser
	7	share, not necessarily just in this document but
	8	generally, you're referring to gaining market share
	9	compared to other competitors; correct?
10		A.	Or any new products that come along.
11		Q.	That are competitive; correct?
12		A.	That people use for that function.
13		Q.	In January of 1996, was it the case
14	that the most important competitive product to
15	Internet Explorer was Netscape's browser?
16		A.	I think by this time the browser that
17	had the highest usage share was Netscape's Navigator.
18			MR. BOIES:  Would you read the question
19	back, please.
20			(Record read.) 
21		Q.	BY MR. BOIES:  Can you answer that
22	question, sir?
23		A.	In terms of users picking browsers, the
24	product that was on the market that competed for
25	usage the most in this time period was probably
	1	Netscape's Navigator.
	2		Q.	Okay.  Was the fact that you've just
	3	described a fact that caused you and Microsoft to
	4	want to study Netscape and determine how you could
	5	reduce Netscape's ability to compete?  
	6			MR. HEINER:  Objection.
	7			THE WITNESS:  I don't know what you
	8	mean by that.
	9		Q.	BY MR. BOIES:  In or about January of
10	1996 or thereafter, did Microsoft try to study
11	Netscape to determine how you could reduce Netscape's
12	ability to compete?  
13			MR. HEINER:  Objection.
14			THE WITNESS:  I don't know what you
15	mean by that.
16		Q.	BY MR. BOIES:  Let me try to break it
17	up into as small a pieces as I can.  
18			In or about January, 1996 or
19	thereafter, did Microsoft, to your knowledge,
20	undertake to try to study Netscape as a company,
21	including where its revenues came from, what its
22	dependencies were, what it needed to remain viable?
23		A.	I'm sure we looked at their revenue. 
24	And I'm sure we looked at their products and their
25	organizational structure.
	1		Q.	Was that in whole or in part a result
	2	of an attempt to find out what their vulnerabilities
	3	were, Mr. Gates?  
	4			MR. HEINER:  Objection.
	5			THE WITNESS:  Did you end the question? 
	6		Q.	BY MR. BOIES:  Both your counsel and I
	7	thought so.
	8		A.	Okay.
	9		Q.	But if you don't understand it, I'll
10	rephrase it.
11		A.	We were interested in learning what
12	users liked about their products and what kind of
13	response customers had.
14		Q.	For my present question I'm not asking
15	about learning about their products just for the sake
16	of learning about their products.  What I'm asking
17	about is whether you were trying to figure out where
18	Netscape's dependencies were so that you could attack
19	Netscape and render Netscape a less effective
20	competitor?  
21		MR. HEINER:  Objection.
22		THE WITNESS:  We were interested in
23	building a product that users would prefer over them.
24	       Q.	BY MR. BOIES:  My question, sir, is
25	whether in addition to whatever you did to improve
	1	your product, were you also attempting to ascertain
	2	what Netscape's dependencies were so that you could
	3	attempt to render Netscape less viable, less able to
	4	compete with Microsoft?  
	5			MR. HEINER:  Objection.
	6			THE WITNESS:  We gathered information
	7	about Netscape like we do a number of companies we
	8	compete with, including IBM, Sun, Novell and many
	9	others.
10		Q.	BY MR. BOIES:  Have you finished your
11	answer?
12		A.	I have.
13		Q.	I'm now asking you about Netscape in
14	particular and I'm asking you whether you gathered
15	information about Netscape for the purpose, in whole
16	or in part, to determine what Netscape's dependencies
17	were so that you could then try to attack those
18	dependencies and render Netscape a less viable
19	competitor?  
20			MR. HEINER:  Objection.
21			THE WITNESS:  It's the compoundness of
22	the question that makes it so confusing.
23		Q.	BY MR. BOIES:  Is the question so
24	confusing that you really think you can't answer it?
25		A.	It's the compoundness that makes it so
	1	confusing that I don't think I can give you a good
	2	answer.
	3		Q.	You gathered information about
	4	Netscape; correct?
	5		A.	People in the company did.  I didn't
	6	personally.
	7		Q.	Well, you asked them to gather
	8	information about Netscape; correct, sir?
	9		A.	I didn't initiate any particular
10	gathering of information.  I may have asked questions
11	once I was presented some information.
12		Q.	You told people that you wanted them to
13	gather information concerning such things as
14	Netscape's revenues and head count and how much
15	revenues they got from various sources, things like
16	that, did you not, sir?
17	       A.	No.  I already -- we already talked
18	about the fact that there was a normal competitive
19	review done of a number of companies, and I didn't
20	initiate that particular review.
21		MR. BOIES:  Let me mark as the next
22	exhibit, which will be Government Exhibit 380, a
23	document that I will give you a copy of and give your
24	counsel copies of.  
25		The first page of Exhibit 380 contains
	1	what purports to be a message from you dated 
	2	December 1, 1996.  Do you see that, sir?
	3		A.	Yes.
	4			(The document referred to was marked
	5	by the court reporter as Government Exhibit 380 for
	6	identification and is attached hereto.)
	7		Q.	BY MR. BOIES:  Did you write that
	8	message?
	9		A.	We've already discussed this particular
10	message.  As I said when we discussed it before, I
11	don't remember specifically sending that message, but
12	I don't have any reason to doubt that I did.
13		Q.	Do you see the first paragraph of this
14	message that says, "What kind of data do we have
15	about how much software companies pay Netscape?"
16		A.	It's weird that you're repeating this
17	exhibit without the enclosures to the e-mail.  I
18	think it's very misleading to have the version of the
19	document -- you had the real exhibit earlier.  Did
20	you lose it?
21		Q.	Mr. Gates, I am prepared to sit here
22	just as long as you want to have whatever debate you
23	want to have.  I think you understand that I put
24	questions and you give answers and if your counsel
25	has an objection, he makes an objection.  And that's
	1	the way the deposition will get over with.  If we
	2	proceed this way, the deposition is never going to
	3	get over with.  If you need to see something else,
	4	we'll take whatever time you need to try to put it in
	5	front of you.  
	6	              What I'm asking you about is a document
	7	that bears Microsoft's document production numbers 
	8	MS6 6013069 with two additional pages, MS6 6013070
	9	and 3071.  The last two pages of this have stamps
10	that say "Privileged Material Redacted," which I will
11	represent to you means that your counsel has whited
12	out what was there.  Now, I don't have any objection
13	to being given that privileged material that has been
14	redacted and I can ask you about that, too, but what
15	I'm asking you about right now is this document that
16	was produced to us by your counsel.  
17	       A.	And I've told you it appears to be
18	incomplete.  
19		MR. HEINER:  If I can cut through this
20	a little bit, Mr. Gates is simply referring to the
21	fact that there was another version of this produced
22	where the material was not redacted because the
23	redaction in this case was in error.  It's a simple
24	matter.
25		MR. BOIES:  But I also think that the
	1	previous exhibit, if I'm thinking about the one that
	2	you have, has a different document production number,
	3	it has a different number of pages.  It was something
	4	marked by the states.  
	5		MR. HEINER:  I think all of that is
	6	probably true.
	7		MR. BOIES:  And I'm happy to have that
	8	other document in front of the witness if he thinks
	9	he needs it.  What I want to do, though, is just talk
10	about his e-mail.  And I don't think his e-mail is in
11	any way incomplete.
12		THE WITNESS:  Yes, sir, it is certainly
13	incomplete.
14	       Q.	BY MR. BOIES:  Okay, sir.  Then tell me
15	how it is incomplete.  
16		A.	Do you see where it says "RE:"?  
17		Q.	Yes.  
18		A.	That means there is an enclosure.
19		Q.	You mean your e-mail is missing the
20	enclosure, is that what you're saying?
21		A.	Right.  So the thing I'm referring to
22	in my e-mail is completely missing here, which it
23	wasn't earlier in this deposition.
24		Q.	It was not missing earlier in the
25	deposition?
	1		A.	That's right.
	2		Q.	All right, sir.  Let's see if we can
	3	find the earlier exhibit that you're referring to. 
	4	Let me see if what you mean to be referring to is
	5	Government Exhibit 353.  
	6		A.	I didn't see it when I flipped through
	7	these.  Do you have 353 in this pile (indicating)?
	8		Q.	If the reporter did her job, which she
	9	almost always has, when you started the deposition
10	today you would have had all of the exhibits in
11	numerical order.  
12		A.	Okay, great.  Here is 353.
13		Q.	Now, first of all, let's see if we can
14	reach some agreement.  Is Exhibit 353 the other
15	exhibit that you were referring to?
16		A.	Yes.
17		Q.	All right.  And Exhibit 353, the e-mail
18	from you, is the same as the e-mail on Exhibit 380,
19	but Exhibit 353 has an additional e-mail; is that
20	correct?
21		A.	No.
22		Q.	Okay.  Let me try to go through 
23	Exhibit 353.  The first e-mail on Exhibit 353 is an
24	e-mail from Mr. Ballmer to you and others; correct?
25		A.	Right.

Continued on page 3 of 4

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