U.S. vs. Microsoft
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Check frequently for dispatches from Post reporter Rajiv Chandrasekaran and for all the Post coverage.

Bill Gates Deposition Excerpts
Part Two

On Monday, November 2, the government released portions of a videotaped deposition of Microsoft CEO Bill Gates taken for the U.S. v. Microsoft antitrust trial.

Video excerpts are available.

Full text of the deposition portions are below. Editor's Note: There may be errors in the text resulting from the scanning process.

Q: BY MR. BOIES: Did you have discussions with Apple in which you were trying to get Apple to agree to help you undermine Sun?
A: There was some discussion about what runtime Apple would support, whether they would support some of ours or some of Sun's. I don't think I was involved in any discussions myself with Apple about that.

Q: Well, let me show you a document and try to probe what you mean by being involved. Let me give you a copy of a document that has been previously marked as Government Exhibit 265.
A: portion of this document is an e-mail message from you to Paul Maritz and others and the portion I'm particularly interested in, and you can read as much of the three-line e-mail as you wish, is the last sentence, which reads, "Do we have a clear plan on what we want Apple to do to undermine Sun? Did you send this e-mail, Mr. Gates, on or about August 8, 1997?" I don't remember sending it. (The document referred to was marked by the court reporter as Government Exhibit 449 for identification and is attached hereto.)

Q. BY MR. BOIES: Do you have any doubt that you sent it?
A: No. It appears to be an e-mail I sent.

Q. You recognize that this is a document produced from Microsoft's files, do you not, sir?
A: No.

Q. You don't?
A: Well, how would I know that?

Q. Do you see the document production numbers down at the bottom?
A: I have no idea what those numbers are.

End of segment.


Q. Let me go back to the e-mail, Mr. Gates. What did you mean when you asked Mr. Maritz whether or not, "We have a clear plan on what we want Apple to do to undermine Sun"?
A: I don't remember.

Q. Did you personally participate in any conversations with Apple in 1997 and 1998?
A: Of any kind?

Q. Let me be a little more specific. Did you participate in any conversations with Apple in 1997 or 1998 concerning what Apple would or would not do that would affect Microsoft competitively?
A: Well, there were some conversations with Steve Jobs about Microsoft office and some and a relationship we formed around that and some other issues.

Q. And did you participate in those conversations?
A: I talked to Steve Jobs on the phone I think twice.

Q. And what was the nature of your conversations with Mr. Jobs?
A: Well, Steve had -- Steve called me up and said that he had become the CEO of Apple, sort of, and that Gil Amelio wasn't the CEO of Apple. And he raised the question of was there some beneficial agreement that we could enter into different than we'd been discussing with Gil. And it wasn't a very long call and the conclusion was that Greg Maffei would go see Steve.

End of segment.


Q. Was it your understanding that Microsoft office for Macintosh was believed by Apple to be very important to them?
A: I really have a hard time testifying about the belief of a corporation. I really don't know what that means.

Q. Well, sir, in making the decisions as to what you would ask of Apple, did you believe that what you were offering Apple with respect to Microsoft Office for Macintosh was important enough to Apple so that they ought to give you something for it?
A: I have no idea what you're talking about when you say "ask."

Q. Well, let me show you a document that has been previously marked as Government Exhibit 268. This is a document bearing Microsoft document production stamps MS98 0110952 through 53. (The document referred to was marked 169 by the court reporter as Government Exhibit a-66 f or identification and is attached hereto.)

Q. BY MR. BOIES: The first part of this purports to be a copy of an e-mail from Don Bradford to Ben Waldman with a copy to you, Mr. Maritz and others on the subject of "Java on Macintosh/IE Control." Did you receive a copy of this e-mail on or about February 13, 1998?
A: I don't know.

Q. Do you have any reason to doubt that you received a copy of this e-mail?
A: No.

Q. The first paragraph reads, "Apple wants to keep both Netscape and Microsoft developing browsers for Mac -- believing if one drops out, the other will lose interest (and also not really wanting to pick up the development burden.) Getting Apple to do anything that significantly/materially disadvantages Netscape will be tough. Do agree that Apple should be meeting - the spirit of our cross license agreement and that Macoffice is the perfect club to use on them." Do you have an understanding of what Mr. Bradford means when he refers to MacOffice as "the perfect club to use on Apple."?
A: No.

Q. The second sentence of that paragraph, the one that reads, "Getting Apple to do anything that significantly/materially disadvantages Netscape will be tough." Was it your understanding in February of 1998 that Microsoft was trying to get Apple to do something to disadvantage Netscape?
A: No.

Q. Do you know why Mr. Bradford would have written this in February of 1998 and sent a copy to you?
A: I'm not sure.

Q. Did you ever say to Mr. Bradford in words or substance in February of 1998 or thereafter, "Mr. Bradford, you've got it wrong, we're not out to significantly or materially disadvantage Netscape through Apple"?'
A: No.

Q. Did you ever tell Mr. Bradford or anyone else in February, 1998 or thereafter, that they should not be trying to get Apple to do things that would significantly or materially disadvantage Netscape?
A: No.

End of segment.


Q. What was Mr. Bradford's position in February of 1998?
A: I think he had a small group in California that worked -- I'm not sure who he worked for. He probably worked for somebody who worked for Silverberg or -- no. No, I'm not sure who he worked for.

Q. Let's begin with what company he worked for. He clearly worked for Microsoft; correct, sir?
A: That's right.

Q. Do you know what his title was?
A: No.

Q. Do you know who Mr. Waldman is?
A: Yes.

Q. What was his title in February of 1998?
A: I don't know.

Q. What were his responsibilities in February of 1998?
A: He was he ran a group that was doing Macintosh software. Neither of these guys have a title like vice-president. That I can say for sure. They have a title like engineer or software engineer, software engineer manager, but I don't know their titles. They're not executives.

Q. In addition to you and Mr. Maritz, copies of this go to David Cole, Dave Reed, Charles Fitzgerald and Jon DeVaan. Do you know what Mr. Cole's position was in 1998?
A: Yes.

Q. What was it?
A: He was the VP -- actually, I don't know VP of what, but he was a VP working for -- I don't know if we reorganized by then. He was in Maritz's organization somewhere.

End of segment.


Q. And Mr. DeVaan?
A: Mr. DeVaan was managing the overall office development.

Q. Did you have any conversations with anyone within Microsoft as to what position Microsoft should take with Apple in terms of what Microsoft should ask Apple for in return for Microsoft developing Mac Office?
A: What time frame are you in?

Q. 1997 or 1998.
A: Well, it actually makes a big difference. We reached an agreement with Apple in 1997 and there's no -- I'm not aware of any agreement other than the 1997 one. MR. BOIES: Could I have the question read back. (The record was read as follows: "

Q. Did you have any conversations with anyone within Microsoft as to what position Microsoft should take with Apple in terms of what Microsoft should ask Apple for in return for Microsoft developing Mac Office?") THE WITNESS: I'm not sure what you're saying about Mac Office. We developed Mac Office because it's a profitable business for us.

Q. BY MR. BOIES: Well, you threatened to cancel Mac Office, did you not, sir?
A: No.

Q. You never threatened Apple that you were going to cancel Mac office; is that your testimony?
A: That's right.

Q. Did you ever discuss within Microsoft threatening Apple that you were going to cancel Mac Office?
A: You wouldn't cancel -- no.

End of segment.


Q. BY MR. BOIES: Now, let me direct your attention to the second item on the first page of this exhibit. And this purports to be an e-mail from Mr. Waldman to.you dated June 27, 1997; is that correct, sir?
A: The second one, uh-huh.

Q. You have to answer audibly yes or no,Mr. Gates.
A: Yes, the second one. Now, in the second paragraph of this e-mail to you, the second sentence reads, "The threat to cancel Mac Office 97 is certainly the strongest bargaining point we have, as doing so will do a great deal of harm to Apple immediately." Do you see that, sir?
A: Uh-huh.

Q. Do you recall receiving this e-mail in June of 1997?
A: Not specifically.

Q. Do you have any doubt that you received this e-mail in June of 1997?
A: No.

Q. Do you know why Mr. Waldman wrote you in June of 1997 that, "The threat to cancel Mac Office 97 is certainly the strongest bargaining point we have, as doing so will do a great deal of harm to Apple immediately"?
A: Well, Mr. Waldman was in charge of this update. And the Mac Office product had been shipping for over a decade by now. And there was a financial question of whether to do this update and he felt it made good business sense to do it. Other people, irrespective of the relationship with Apple, had said that it didn't make sense to do the update. And so there was some mail from Ben, including this one, where he was saying he thought we should go ahead and finish the product. I'm not sure what he means about the negotiations with Apple. I'm not sure what we were negotiating with Apple at this point.

Q. Was this the time that you were negotiating with Apple to try to find out what you could get Apple to do to undermine Sun?
A: Well, the only e-mail -- the only thing you've shown me where that term was used is after we reached a Mac Office agreement with Apple.

Q. You're referring to your e-mail dated August 8, 1997; is that correct?
A: That's right.

Q. That has been marked as Exhibit -3-&5; is that correct?
A: That's right. That's after.

Q. That's August 8, 1997?
A: That's right.

Q. And it is clear from your August 8, 1997 memo that you are still attempting to get Apple to do additional things, is it not, sir?
A: No.

Q. Well, sir, let's read it. It's only three lines. You write, "I want to get as much mileage as possible out of our browser and Java relationship here." And when you talk about "here," you're talking about with Apple, are you not, sir?
A: I'm not sure.

Q. Well, the subject of this is Post-agreement"; correct, sir?
A: Yeah. That's what makes me think this was probably post-agreement.

Q. Post-agreement with Apple; right?
A: Yes.

Q. So the subject is post-agreement with Apple, and the very first sentence is, "I want to get as much mileage as possible out of our browser and Java relationship here." Second sentence says, "In other words, a real advantage against Sun and Netscape." Third line says, "Who should Avie be working with? Do we have a clear plan on what we want Apple to do to undermine Sun?" Now, do you have any doubt that when you talk about, "I want to get as much mileage as possible out of our browser and Java relationship here," you're talking about Apple?
A: That's what it appears.

Q. Do you have any recollection of any discussions about the subje ct matter of this e-mail 1ine or about August of 1997? If the question is confusing, I'd be happy to rephrase it, Mr. Gates.
A: Go ahead.

Q. Did you send this e-mail?
A: It appears I did.

Q. Did you discuss this e-mail with anyone?
A: I don't remember that.

End of segment.


Q. Let me go back to Exhibit 9-6- 6, which is the June 27, 1997 e-mail from Mr. Waldman to you. Do you recall -- and I know you've said you don't recall receiving this e-mail, but do you recall anyone describing the threat to cancel Mac Office 97 as a bargaining point that you had in dealing with Apple in or about June of 1997?
A: I remember going to meetings where Paul Maritz took the position that we shouldn't do the update, the Mac Office 97 update. And the main negotiation we had with Apple at that point was a discussion about a patent cross license. And so I said to Paul I wanted to understand better where we were on the patent cross license and understand the state of the Mac Office development. And then it appears that this is an e-mail that is coming after that meeting. I don't remember somebody using those exact words.

Q. Whether you remember somebody using the exact words that Mr. Waldman uses in his June 27, 1997 e-mail to you, do you remember people telling ou in substance that the threat to cancel Mac office 7 97 was strong bargaining point that you had against 8 Apple and that cancelling Mac Office 97 would do a great deal of harm to Apple immediately?
A: I know there was the internal debate about whether to do the update. And I know there was the patent discussion going on. And I said that. maybe even if it didn't make business sense to do the 14 date, maybe as part of an overall relationship with 15 the tent cross license, that we should go ahead and 16 do it. And so commitment to do the upgrade was one 17 of the things that we told Apple we might commit to as part of the patent cross license relationship.

Q. And did you believe in 1997 that cancelling Mac office 97 would do a great deal of harm to Apple, as Mr. Waldman writes it would?
A: There was a question about whether to do the upgrade and whether it made business sense. I can't really say how much impact it would have on Apple of us doing the upgrade or not. Certainly Ben, as the person in charge of the upgrade, was very passionate about its importance and its dramatic nature.

Q. My question to you now, sir, is whether you believed that cancelling Mac office 97 would do a great deal of harm to Apple?
A: Well, I know that Apple would prefer that we have a more updated version of Mac Office, that that would be a positive thing for them, and so that's why it was part of the negotiation relative to the patent cross license.

Q. And did you believe that cancelling Mac office 97 would do a great deal of harm to Apple?
A: I told you I think it would be better for Apple to have everybody doing major upgrades like this. I doubt -- I can't characterize the level of benefit of the upgrade to Apple, but certainly it's something they wanted us to complete.

Q. The next sentence in Mr. Waldman's June 27, 1997 e-mail to you begins, "I also believe that Apple is taking this threat pretty seriously." Did someone tell you in or about June of 1997 that Apple was taking Microsoft's threat to cancel Mac Office 97 seriously or pretty seriously?:
A: Well, Maritz had taken the position of it it didn't make business sense to finish this upgrade. And it's very possible Apple might have heard about Maritz's opinion there and therefore been worried that we, businesswise, didn't see a reason to complete the upgrade and that they would have the older Mac Office as opposed to this new work that we were part way along on.

Q. Mr. Gates, my question is not what position Mr. Maritz did or did not take. My question is whether anyone told you in or about June of 1997 that Apple was taking pretty seriously Microsoft's threat to cancel Mac Office 97?
A: Apple may have known that senior. executives at Microsoft, Maritz in particular, thought that it didn't make business sense to complete that upgrade.

Q. Mr. Gates, I'm not asking you what Apple may have known or may not have known. What I'm asking you is whether anybody told you in or about June of 1997 that Apple was taking pretty seriously Microsoft's threat to cancel Mac Office 97?
A: Those particular words?'

Q. Told you that in words or in substance.
A: I think I remember hearing that Apple had heard about Maritz's view that it didn't make sense to continue the upgrade, but -- and that, you know, they wanted us to continue the upgrade. But I -- I don't remember any of the -- it being rased at all the way you're phrasing it.

Q. Well, the way I'm phrasing it is the way that Mr. Waldman phrased it to you in his e-mail of June 27, 1997; correct, sir?
A: Well, in reading it, I see those words, yes.

End of segment.


Q. Mr. Gates, Mr. Waldman on June 27, 1997, sends you an e-mail that says, "The threat to cancel Mac Office 97 is certainly the strongest bargaining point we have, as doing so will do a great deal of harm to Apple immediately. I also believe that Apple is taking this threat pretty seriously." Do you recall anyone
A: Do you want to finish the sentence or not?

Q. You can if you think it is necessary to answer the question. Do you recall anyone telling you what I have just quoted in words or in substance in or about June, 1997?
A: No.

End of segment.


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