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When Microsoft backed a key motion filed two weeks ago in Epic Games’ antitrust lawsuit against Apple, it raised a few eyebrows.
Two decades ago, the US Justice Department, 18 states, and the District of Columbia sued Microsoft on allegations the Windows operating system represented a monopoly that the company was wielding to prop up its then fledgling Internet Explorer browser, in violation of the Sherman Antitrust Act of 1890. The suit expressly claimed that Microsoft was using Windows to freeze out the Netscape browser and, more tacitly, Sun Microsystems’ cross-platform Java platform as well.
The software maker vehemently bristled at the allegations and claimed that the action represented a government intrusion brought at the behest of companies that couldn’t compete on the merits. Microsoft warned that the action would set a dangerous precedent that could stifle innovation for years to come.
The company’s legal response was one of the most vigorous I’ve covered in my 25 years as a journalist. The PR campaign reached shock-and-awe proportions, as well, with handlers at one point arranging a poorly executed astro turf campaign intended to galvanize public opinion against the legal action.
Now, in 2020, a Microsoft executive has submitted sworn written testimony in support of plaintiff Epic Games alleging that Apple has a “complete monopoly over the distribution of apps to the billion users of iOS … to coerce app developers into using Apple’s payment platform.”
The legal declaration, from Microsoft Gaming Developer Experiences General Manager Kevin Gammill, came in response to Apple’s threat to deny Epic access to software development tools it needed to develop its Unreal Engine game platform for use on iOS. Apple made the threat after Epic tried to use its own payment system in the iOS version of Fortnite to get around Apple’s 30-percent platform fee. That move quickly got the game pulled from the Apple App Store and led Epic to file a lawsuit in response.
Gammill said that any move harming development of Epic’s Unreal Engine on iOS would hurt Microsoft’s business, because “in Microsoft’s view there are very few other options available for creators to license with as many features and as much functionality as Unreal Engine across multiple platforms, including iOS.”
While Microsoft’s filing expressed no opinion on the underlying antitrust claims, the declaration nonetheless illustrated a dramatic about-face for a company culture that once wore its contempt for antitrust law and theory on its sleeve. No longer the Goliath it once was—in large part because of the ascendance of companies like Google, Facebook, and Apple made possible by a settlement Microsoft signed—Microsoft was now comfortable supporting the Davids of the tech industry.
The August filing also represented a major reversal of another sort. In the mid to late 1990s when the events leading to the antitrust suit were playing out, Apple was on life support. Microsoft knew this, and according to the government suit, the company used the maker of Macs as a pawn in a bid to blunt the threat Navigator and Java posed to the Windows monopoly. Now, Apple represents the Goliath Microsoft was helping to slay.
All of this got me thinking about the one of the most memorable parts of my coverage of Microsoft antitrust trial—the videotaped deposition of Bill Gates, the company’s cofounder and at the time its CEO and chairman. At its most basic level, the deposition underscored the utter contempt he had for an action he believed impinged the ability of his company—and others to follow, he warned—to design products and conduct business as they saw fit.
The strategy during the three-day deposition was classic Microsoft. Obstruct. Paint the government as out-of-touch policy wonks who had no idea how tech and real markets worked. And above all, deny even the most basic of premises in the government’s case. The plan from Gates’ army of lawyers and PR handlers seemed to be to wield his image as a software wunderkind who dropped out of Harvard to bootstrap his company and went on to become the world’s richest man. Team Gates planned to use that same domineering force of will to beat back government lawyers.
A spectacular failure
By day 2, it became clear that strategy was failing spectacularly. As New Yorker writer Ken Auletta once noted, Gates had never in his life groveled for a job or suffered many of the indignities most of us experience on a regular basis. He regularly berated reporters for asking what he’d say were stupid questions. Publicly lauded as the wise sage, consummate businessman, and industry visionary, Gates was accustomed to being treated with obsequious deference from all but a small number of peers. As such, he had little or no experience tolerating—let alone encountering—dissent, criticism, or challenges to his authority.
The lack of experience played right into the government’s hand. Instead of portraying a leader in control of his domain and confident in his case and his company’s legal and ethical righteousness, the courtroom videos showed a side of Gates that had never been on public display before. He was petulant, petty, flustered, and dour. He was ineffectual. He was, in a word, beaten.
During three days of intense questioning, Gates often feigned ignorance of his own company’s policies and actions. He parsed everyday words or phrases such as “concern,” “support,” and “piss on.” Gates seemed to use the strategy to evade tough questions about whether his company abused its entrenched Windows franchise to kill off emerging competitors, such as Navigator and Java. To the surprise of him and his many attorneys and image handlers, Gates came off as argumentative, petty, and someone badly losing ground to a more formidable rival.
One example came in this exchange with David Boies, the private attorney hired by the Justice Department:
Boies: What non-Microsoft browsers were you concerned about in January of 1996?
Gates: I don’t know what you mean “concerned.”
Boies: What is it about the word “concerned” that you don’t understand?
Gates: I’m not sure what you mean by it.
Gates: Is there a document where I use that term?
Boies: Is the term “concerned” a term that you’re familiar with in the English language?
Boies: Does it have a meaning that you’re familiar with?
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Not particularly responsive
Justice Department lawyers played portions of the deposition during opening arguments and then periodically during as the trial progressed. Gates’ attorneys were visibly vexed. Sitting in the gallery of the federal court room in Washington, DC, reporters broke into laughter more than once. Some of them had spent entire careers listening to Gates regularly launch verbal broadsides or wage one-sided arguments. For the first time, the tables were turned.
At one point, Thomas Penfield Jackson, the judge hearing the case, chuckled, too. When Microsoft lawyers argued during a closed-door session that the deposition was turning into a side show and government lawyers should be barred from showing any more segments during the trial, the judge denied the motion, saying: “If anything, I think your problem is with your witness, not with the way in which his testimony is being presented.” Jackson continued:
I think it’s evident to every spectator that, for whatever reasons, in many respects Mr. Gates has not been particularly responsive to his deposition interrogation. Everybody at your table has reflected skepticism as the testimony is presented.
Not long afterward, Gates appeared before reporters in a video news conference in Washington and told them Boies was “out to destroy Microsoft.”
I’ve compiled some of the videotape segments that captured some of the more memorable deposition moments. Narrowing more than a dozen hours of video down to a handful of clips was challenging. In fairness to Gates, I mainly chose exchanges that showed him at his worst.
The first two examples, taped just before and just after a lunch break on August 28, 1998, are telling for Gates’ evasion and belligerence as he parses industry standard words such as “API”—short for application programming interface—not to mention everyday words such as “support” and “concern.”
During one of these exchanges, Boies asked about the terms for Microsoft giving Intuit an icon on the Active Desktop—the term for the Windows 98 home screen—that would allow users instant access to the tax preparation site.
Intuit CEO William Harris’s office had already told government lawyers that Microsoft conditioned the placement on the bundling of IE with Intuit products and on not promoting Netscape on Intuit’s websites or allowing Intuit’s website customers to access Netscape’s products or services.
The legal significance of such a policy was that Microsoft was using the monopoly power of Windows to promote IE, in violation of antitrust laws. Here, Gates tries to deflect questions about whether Will Poole, Microsoft’s senior director of business development, ever required Intuit to give preferential treatment to IE and less favorable treatment to Navigator.
In the months following the deposition, Gates’ reluctance to answer became clear. In February 1999, Justice Department attorneys called Poole as a witness and obtained his testimony that Microsoft routinely required companies that wanted top Active Desktop billing to create Web content that gave a “degradation in appearance” when viewed with non-IE browsers. Poole went on to say that Microsoft’s deal with Intuit required the latter to develop “some differentiated content” on its website with “acceptable degradation when used with other browsers.”
Gates’ exchange with Boies starts to turn testy around 1:41:00 (or 11:48 am as noted in the video itself) after Gates repeatedly asks for a definition of the word “support.”
Another tense moment starts around 9:23 (deposition clock time August 28, 12:47pm) in this segment as the topic turns to Java and whether Microsoft set out to kill its “write-once-run-anywhere” promise by creating a version that wasn’t compatible with Sun’s. Boies presents Gates with an email from Ben Slivka, the Microsoft manager responsible for executing the Java strategy. The email notes that Gates recently “had a lot of pretty pointed questions about Java,” one of which was, “How do we wrest control of Java away from Sun?”
For more than six minutes, Gates is unable to concede even the most basic of facts. That Slivka is working on behalf of Microsoft to forge its Java strategy, that Gates even received the email. Then Gates uses a non-denial denial when asked if Slivka was accurate in saying one of Gates’ questions involved Microsoft “wresting” control of Java from Sun.
Shortly afterward, Gates takes a similar approach when asked about an email, with the subject “Java schism,” that Gates received from Microsoft VP Paul Maritz. The stalling lasts more than six minutes.
Things come to a head at 21:41 when Gates parses the words “proprietary API” and debates Boies on the semantics of the phrase. Boies finally snaps.
Boies: Mr. Gates, is the term proprietary API a term that is commonly used in your business?
Gates: Let me give you …
Boies: all I’m trying to do is …
Gates: … the common meanings that those words could have and you can pick one of them and ask me a question about it
Gates: Do you want me to define proprietary API or not?
Boies: No, I don’t want you to define proprietary API. I didn’t ask you to define proprietary API. I asked you a simple question about whether the term proprietary API was commonly used in your business. Now I’m prepared to sit here as long as you want to to answer questions that I haven’t asked. But I have a certain number of questions that I am going to ask at the end of these other answers. Now this is a simple question. You can say yes, no, or it is used in lots of different ways. But then I can choose what to follow up on. Or you can simply make whatever statements you want and I’ll go back to my question afterwards. Now, is the term property API a term that is commonly used in your business?
Gates: I don’t know how common it is. It has many different meanings.
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Getting Apple to undermine Sun
Apple also played a prominent role in the deposition, as it did in the trial as well. With Apple’s future hanging on a thread in the mid to late 1990s, the Mac maker was eager to secure a commitment from Microsoft to develop Office for Macintosh. Microsoft knew this, and in an email dated August 8, 1997, Gates asked Maritz: “Do we have a clear plan on what we want Apple to do to undermine Sun?”
Watching Gates rock forward and backward in a conference room chair, taking swigs of diet Coke and sparring with Boies, it’s impossible to deny the comedic gold in the exchange starting about about 32:30 of this segment. Gates is so dug in against Boies and the lawsuit he’s prosecuting to concede even that Microsoft would have been the company that produced the email he sent to Maritz.
Another passage with comedic value occurs a few minutes later when Gates—referring to Apple cofounder Steve Jobs’ 1997 return to Apple after resigning eight years earlier—says: “Steve called me up and said that he’d become the CEO of Apple, sort of, and that the Gil Amelio wasn’t the CEO of Apple. And he raised the question of was there some beneficial agreement we could enter into different than we’d been discussing with Gil.”
A few lines later, Gates reminds Boies that Microsoft at the time was the biggest software developer for the Mac.
“As the largest developer of software for the Macintosh, is what you do important to Apple?” Boies asked
Gates responded matter of factly: “Sometimes it doesn’t seem like it.“
A “perfect club” to use on Netscape
Humor aside, Gates once again appeared either out of touch or disingenuous in the segments involving Apple. He said he didn’t remember what he meant when, as reflected in an email from Maritz, he had asked if Microsoft had a clear plan for what it wanted Apple to do to undermine Sun.
The tone turned serious, even somber, when Boies presented Gates with a different email sent between lower-ranking employees Don Bradford and Ben Waldman and and cc’ing Gates and Maritz. Bradford wrote:
Apple wants to keep both Netscape and Microfsoft 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 Netsecape will be tough. Do agree that Apple should be meeting the spirit of our cross-license agreement and that Mac Officis is the perfect club to use on them.
Boies: Do you have an understanding of what Mr. Bradford means when he refers to Mac Office as quote ‘the perfect club to use on Apple,’ closed quote.
Boies: Was it your understanding in February of 1998 that Microsoft was trying to get Apple to do something that would disadvantage Netscape?
Reality sets in
It’s at about this point that you can see the combativeness drain Gates and slowly be replaced with resignation.
Boies Do you know why Mr. Bradford would have written this in February of 1998 and sent a copy to you?[Long pause]
Gates: I’m not sure.
Boies: Did you ever say to Mr. Bradford in words or in substance, in February of 1998 or thereafter: “Mr. Bradford, you got it wrong. We’re not out to significantly or materially disadvantage Netscape through Apple”?
Boies: 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?[Long pause]
Boies may not have gotten answers, but his questions and the responses they evoked spoke volumes about Gates. For the many reporters in the room that had been browbeaten by the CEO or whose questions had been sidestepped over the years, the exchanges were pure comeuppance. And many years later, they now serve as a time capsule of a very different Microsoft.
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