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Microsoft wouldn't let clients tout rival; Customers couldn't get on Windows desktop unless they agreed


WASHINGTON -- A Microsoft Corp. executive acknowledged yesterday that major operators of Internet Web sites had to agree not to promote Netscape Communications Corp.'s Internet browser as the price for receiving featured placement on the Windows desktop.

Microsoft Chairman Bill Gates mandated that if companies such as the Walt Disney Co. and Intuit Inc. wanted "top level" marketing agreements, they "would be promoting Microsoft's Internet Explorer preferentially to Netscape Navigator and any other leading browser," Will Poole, Microsoft's senior director of business development, testified at the company's antitrust trial.

During a recess, David Boies, the government's chief trial lawyer, told reporters outside the courthouse that Gates' offer "in economic terms" amounted to a "bribe."

Microsoft spokesman Mark Murray said he was "frankly shocked" that Boies would call Gates' offer a bribe. Murray said Gates was merely offering to compensate Intuit for "significant sunk cost, $1 million or more" to re-engineer Quicken to quickly adapt it to Internet Explorer.

Intuit, maker of the popular Quicken financial planning software, agreed to the restriction because it wanted access to millions of consumers whose personal computers come installed with the Windows operating system, Poole testified. "They told me that was very important to them."

Poole was called to the witness stand by Microsoft to rebut testimony by Intuit Chief Executive Officer William Harris Jr.

Harris testified earlier in the trial, now in its fourth month, that Microsoft had required Intuit "to forgo any business relationship with Netscape" as a condition for having the Web site promoted in the Windows desktop.

Microsoft is accused of using its dominance in the operating system market to crush competition from Netscape, whose rival Navigator Web browser was viewed as a threat to the dominance of Windows. One way was to ban major Internet content providers such as Intuit and the Disney Channel from promoting Navigator and instead endorse Internet Explorer, the government charges.

Under cross-examination by Boies, Poole acknowledged that as a condition for placement on the desktop, Intuit had to curtail marketing and a promotion agreement with Netscape, and had to agree to use Internet Explorer in its software programs that also included TurboTax, a popular tax preparation program.

Pub Date: 2/09/99

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