Bonum Certa Men Certa

Transcripts of Bill Gates’ Lies: Part II

Part 2 (of a total of 4)

Gates deposition 1998



Summary: Techrights is curating and maintaining plain text versions of the Gates deposition of 1998, in which years if not decades of the company's abuses were scrutinised in a face-to-face fashion

Previous parts: Part I

Videos of the deposition: First part, second part, third part, fourth part, fifth part, sixth part, seventh part, eighth part, ninth part, tenth part, eleventh part, and last part

Selected transcripts of the deposition: Few annotated transcripts and longer transcripts







1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE DISTRICT OF COLUMBIA
3
4
5 UNITED STATES OF AMERICA, )
)
6 Plaintiff, )
)
7 vs. ) No. CIV 98-1232(TPJ)
)
8 MICROSOFT CORPORATION, ) VOLUME II
) (Morning Session)
9 Defendant. )
) CONFIDENTIAL
10 )
11
12
13 CONTINUATION OF THE DEPOSITION OF
14 BILL GATES, a witness herein, taken on behalf of the
15 plaintiffs at 9:09 a.m., Friday, August 28, 1998, at
16 One Microsoft Way, Redmond, Washington, before
17 Kathleen E. Barney, CSR, pursuant to Subpoena.
18
19
20
21
22
23 REPORTED BY:
Kathleen E. Barney,
24 CSR No. 5698
Our File No. 1-49006
25

1 APPEARANCES OF COUNSEL:
2 FOR THE UNITED STATES OF AMERICA:
3 UNITED STATES DEPARTMENT OF JUSTICE
BY PHILLIP R. MALONE
4 KARMA M. GIULIANELLI
450 Golden Gate Avenue
5 Box 36046
San Francisco, California 94102
6 (415) 436-6660

7 BOIES & SCHILLER LLP
BY DAVID BOIES
8 80 Business Park Drive
Armonk, New York 10504-1710
9 (914) 273-9800
10 FOR MICROSOFT CORPORATION:
11 MICROSOFT CORPORATION
LAW AND CORPORATE AFFAIRS
12 BY DAVID A. HEINER
WILLIAM H. NEUKOM
13 One Microsoft Way
Redmond, Washington 98052
14 (425) 936-3103
15 SULLIVAN & CROMWELL
BY RICHARD J. UROWSKY
16 125 Broad Street
New York, New York 10004
17 (212) 558-3546
18
FOR THE PLAINTIFF STATES:
19 STATE OF NEW YORK
20 OFFICE OF ATTORNEY GENERAL
BY STEPHEN D. HOUCK
21 GAIL P. CLEARY
THEODORE ZANG
22 120 Broadway
New York, New York 10271-0332
23 (212) 416-8275
24 ALSO PRESENT: PRISCILLA ALVAREZ, Paralegal
MICHEL CARTER, Video Operator
25
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900




1
2 I N D E X
3 WITNESS EXAMINATION BY PAGE
4 Bill Gates Mr. Boies 279
5
6
GOVERNMENT
7 EXHIBITS:
8 365 E-mail from Bill Gates to Paul 299
Maritz
9
366 E-mail from Don Bradford to Ben 310
10 Waldman
11 367 E-mail from Ben Waldman to Greg 315
Maffei
12
368 E-mail from Bill Gates to Ben 316
13 Waldman
14 369 Series of e-mails, the first of 327
which is from Joachim Kempin to
15 Bill Gates
16 370 E-mail from Don Bradford to various 350
people
17
371 Series of e-mails, the first of 354
18 which is from Paul Maritz to Bill
Gates and Bob Muglia
19
20
21
22
23
24
25
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 BILL GATES,
2 a witness herein, having been duly sworn, was deposed
3 and testified further as follows:
4
5 EXAMINATION (Continued)
6 BY MR. BOIES:
7 Q. Good morning, Mr. Gates.
8 Are you going to be a witness at the
9 trial of this matter?
10 MR. HEINER: Objection.
11 THE WITNESS: I don't know.
12 Q. BY MR. BOIES: Do you intend to be a
13 witness at the trial of this matter?
14 MR. HEINER: Objection to this line of
15 questioning. The witness list comes out next week
16 and there is a court order in place on this.
17 MR. BOIES: I'm entitled to ask the
18 witness whether he intends to appear at trial. You
19 people have certainly done that with witnesses. I
20 think it is a common question. If you instruct him
21 not to answer, you can instruct him not to answer.
22 MR. HEINER: I haven't done that. I've
23 posed an objection.
24 Q. BY MR. BOIES: Do you intend to be a
25 witness at trial?
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1 A. I don't know.
2 Q. All right.
3 MR. BOIES: And the purpose, obviously,
4 was because if we knew whether he was going to be a
5 witness at trial, that might shorten and change the
6 examination. It's a common question. I don't know
7 why you object to it.
8 Q. Mr. Gates, when did you first become
9 concerned about the competitive threat that Netscape
10 posed to Microsoft?
11 A. I know by late '95 we were thinking of
12 Netscape as one of our many competitors, so I think
13 it would have been around then.
14 Q. When did you first become concerned
15 about the competitive threat that Java posed to
16 Microsoft?
17 A. Well, Java as a computer language does
18 not pose a competitive threat to Microsoft. There is
19 some runtime work that various people, companies are
20 doing with different APIs, including Sun, that
21 represent platform competition. So you have to be
22 careful about how you talk about Java.
23 Q. Do you talk about Java as a competitive
24 threat to Microsoft, Mr. Gates?
25 A. There's a lot of documents and
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1 understanding inside Microsoft that Java the
2 language, which if you take the term Java on the face
3 of it and then in some context that it refers to,
4 that that is not a competitive threat. In fact, we
5 are the leading vendor of Java language development
6 tools. Sometimes in the right context when people
7 use that term, they're talking about various runtime
8 activities. But, you know, you have to look pretty
9 carefully at the context.
10 Q. My question right now doesn't go to
11 what various people within Microsoft have said or
12 believe. My question goes to what you have said. Do
13 you refer -- have you referred to Java as a
14 competitive threat to Microsoft?
15 A. The Java runtime activities are a
16 competitive threat to Microsoft. Java itself is not.
17 So if I use the term Java that way, I'm careful to
18 make sure people know I'm talking about the runtime
19 piece.
20 Q. Have you sometimes as a shorthand
21 referred to Java, as opposed to what you now say as
22 the Java runtime activities, as a competitive threat
23 to Microsoft?
24 A. I may have if I made it clear what I
25 meant.
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1 Q. And by making it clear what you meant,
2 can you explain what you mean by that?
3 A. To draw the distinction between Java
4 the language and the runtime activities around Java,
5 the APIs being created there by various companies.
6 Q. Have you received e-mail from people
7 that described Java as a competitive threat to
8 Microsoft?
9 A. Well, inside Microsoft the context of
10 the various pieces of Java, including in a lot more
11 detail than I've had a chance to explain to you so
12 far, is well understood. And so we use a lot of
13 shorthands for a lot of things that confuse people
14 who just look at the e-mails.
15 MR. BOIES: Can I have the question
16 read back, please.
17 (Record read.)
18 THE WITNESS: Under the scenario I
19 described, it's possible that people would do that in
20 e-mail.
21 Q. BY MR. BOIES: When you say "under the
22 scenario that I described," what scenario are you
23 talking about?
24 A. The scenario is people inside Microsoft
25 who have an understanding of the various pieces of
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1 Java who are communicating with each other.
2 Q. Let me try to be clear. My question
3 does not encompass any scenario. My question is
4 simply have you received e-mail from people within
5 Microsoft that described Java as a competitive threat
6 or assert that Java is a competitive threat to
7 Microsoft?
8 MR. HEINER: Objection. You have a
9 very full answer, precise and clear, to that
10 question. The witness may answer again.
11 THE WITNESS: Yeah, I've described the
12 circumstances under which it's possible I've gotten
13 an e-mail like that.
14 Q. BY MR. BOIES: My question is not what
15 are the circumstances under which it is possible that
16 that happened. My question is have you received
17 e-mail from people in Microsoft that assert that Java
18 is a competitive threat to Microsoft?
19 A. It's possible there is someone who,
20 having the right context about the pieces that are
21 entailed in Java, may have used that as a shorthand
22 for the piece we consider a competitive threat.
23 Q. My question is not what is possible but
24 what you recall. If you don't recall ever receiving
25 an e-mail in which somebody from Microsoft asserted
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1 that Java was a competitive threat, that's an answer
2 to my question. You can say "Yes," "No," "I don't
3 recall," but --
4 A. I don't recall a specific piece of
5 mail. I think there is a good chance I've received
6 mail where somebody used that kind of shorthand.
7 Q. Now, have you used that kind of
8 shorthand, that is, have you personally asserted that
9 Java is a competitive threat to Microsoft?
10 A. Well, I always object to -- you're
11 acting like the assertion stands by itself. There is
12 a shorthand that I've told you about, so no, I've
13 never asserted that statement. We use the term Java
14 in a variety of contexts and if you want to show me a
15 context, I'll answer. But the assertion on the face
16 of it is wrong unless somebody is using the term Java
17 in a very special way.
18 Q. What I'm asking you, Mr. Gates, is
19 whether you have used Java in what you described as
20 the very special way to refer, as a shorthand, to
21 whatever it is that you believe constitutes a
22 competitive threat to Microsoft?
23 A. I don't remember a specific document
24 where I did, but I think it's quite likely that with
25 certain people I used that shorthand.
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1 Q. Okay. When you use Java as a shorthand
2 in describing Java as a competitive threat to
3 Microsoft, am I to understand that what you mean in
4 that context is to refer to what you have described
5 here as the Java runtime activities?
6 A. If you want to get into what we mean by
7 the shorthand, you'll have to show me a specific
8 context because sometimes it might mean EJB,
9 sometimes it might just mean the VM, sometimes it
10 might mean AWT, sometimes it might mean JFC. I mean
11 I'll be glad to clarify any particular case. You
12 have to have the context.
13 Q. If necessary we'll go through each one
14 context by context, although that's obviously a
15 lengthy procedure, but let me see if I can try to get
16 some general principles.
17 When you refer to Java as a competitive
18 threat to Microsoft, what do you mean?
19 A. I've told you it depends on the
20 context.
21 Q. Why don't you list each of the
22 different things that you mean when you describe Java
23 as a competitive threat to Microsoft.
24 A. I don't know what you mean. You're
25 asking me to recall every context where I might have
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1 ever used that shorthand?
2 Q. Well, I'm asking you to tell me every
3 context that you do recall.
4 A. I've told you I don't recall any
5 specific document where I've used the shorthand. I
6 can give you several contexts where it's very likely
7 that I have.
8 Q. If that's the best you can do, let's
9 start with that.
10 A. Well, there's the context of server
11 middleware APIs and EJB discussion. And people who
12 write three-tier applications, what APIs are they
13 likely to develop their applications against.
14 Q. And why does Java, in your view,
15 represent a competitive threat to Microsoft with
16 respect to server middleware or EJBs?
17 A. I've told you that Java itself is not
18 the competitive threat. I'm telling you the thing
19 that is the competitive threat, so when you rephrase
20 it to say Java is the competitive threat, that's just
21 the shorthand term. The competitive threat is the
22 APIs and the EJB and the other middleware layers that
23 people are putting together.
24 Q. Well, Mr. Gates, in your view does Java
25 play, itself, any role in what you view as a
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1 competitive threat to Microsoft?
2 A. Java the language?
3 Q. Yes, let's start with Java the
4 language.
5 A. No.
6 Q. When you refer to Java as a competitive
7 threat, why do you use the word Java as shorthand for
8 what you now say doesn't relate to Java?
9 MR. HEINER: Objection.
10 THE WITNESS: I didn't say that. It
11 certainly relates to Java. Java runtime relates to
12 Java. I mean give me a break.
13 MR. BOIES: Move to strike the answer
14 as nonresponsive.
15 MR. HEINER: Objection to the question
16 as grossly misstating the prior testimony.
17 MR. BOIES: You can object all you
18 want, but if your object is to get this deposition
19 over with, I would suggest that you make your
20 objections before the question and not as a speech to
21 try to support the witness after the witness begins
22 to engage in that kind of colloquy.
23 MR. HEINER: It certainly was a short
24 speech, wasn't it?
25 Q. BY MR. BOIES: Mr. Gates, you know
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1 perfectly well that you and lots of other people
2 within Microsoft describe Java, J-a-v-a, without
3 talking about runtimes or EJBs or server middleware,
4 but Java, J-a-v-a, as a competitive threat. You know
5 that, don't you?
6 A. I've told you that when we talk about
7 the Java runtime threat, we often use Java as a
8 shorthand for that. We haven't come up with another
9 term for the Java runtime competitive threat in its
10 various forms.
11 Q. When did you first become concerned
12 about the Java runtime threat to Microsoft?
13 A. Well, there have been a lot of changes
14 in the strategies of Sun and various people. I know
15 there was talk about Java in the second half of '95
16 but, you know, I don't think we really understood
17 what the various people around were doing. Sometime
18 in '96 when Sun was doing its promotion of writing
19 applications strictly to the Java runtime, to their
20 Java runtime, which is one of them, and in fact they
21 have multiple, then we would have looked at that as
22 something we needed to understand and decide how it
23 affected our strategy.
24 Q. My question is not when you decided you
25 needed to look at Java to decide something. My
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1 question is when did you first conclude that what you
2 have referred to as the Java runtime threat was a
3 competitive threat to Microsoft?
4 MR. HEINER: Objection.
5 THE WITNESS: Well, it gets a little
6 complicated because there's some even runtime pieces
7 of Java that we support, but there are some things
8 that people are doing in those runtimes that we have
9 a different approach. But that's all, you know, more
10 recent in terms of understanding how -- what our
11 products are going to do.
12 Q. BY MR. BOIES: My question is when did
13 you first conclude that what you have described as
14 the Java runtime threat was a competitive threat to
15 Microsoft?
16 A. I think there was a lot of discussion
17 about what to do with Java and Java runtime things
18 and there was a part of what Sun was doing that by
19 late '96 we had decided not -- there were some
20 extensions they were doing in late '96 that we
21 thought of as competitive.
22 Q. Do I understand that last answer to be
23 that it would not have been until late 1996 that you
24 considered what you have described as the Java
25 runtime threat as a competitive threat to Microsoft?
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1 A. Well, you use the word "conclude" and
2 there's a long period of time where there is a lot of
3 thinking about Java runtime inside Microsoft where
4 people are going back and forth. And some people
5 will say hey, this is fine, it's not competitive and
6 then somebody would say hey, maybe it is competitive.
7 So there's a lot of going back and forth. So when
8 you use the term "conclude," I assume you're talking
9 about a point at which there is a clear opinion and
10 not just a lot of debate, you know, even -- you know,
11 my view being established. And so then I think
12 you've got to go as late as late '96 before there's
13 much clarity at all.
14 Q. I think you may have answered the
15 question, but I want to be sure because my question
16 relates not to what other people were saying within
17 Microsoft but what you believed. And what I'm trying
18 to find out is when you, Bill Gates, first believed
19 that what you have described as the Java runtime
20 threat was a competitive threat to Microsoft?
21 A. Well, you used the word "conclude"
22 and --
23 Q. Actually, in this last question I used
24 the word "believe."
25 A. So you're changing the question?
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1 Q. Well, if believe and conclude is
2 different for you, I'll ask it both ways.
3 A. Yeah, it's very different. In late --
4 Q. Then let me ask the question so the
5 record is clear what you're answering.
6 A. You don't want to let me answer the
7 last one?
8 Q. If that's what you're going to answer,
9 let's read the question back.
10 Would you reincorporate the question so
11 the record is clear that what follows is intended to
12 be a response to this particular question.
13 (The record was read as follows:
14 "Q. I think you may have answered
15 the question but I want to be sure because my
16 question relates not to what other people were
17 saying within Microsoft but what you believed.
18 And what I'm trying to find out is when you,
19 Bill Gates, first believed that what you have
20 described as the Java runtime threat was a
21 competitive threat to Microsoft?")
22 THE WITNESS: In the first part of '96
23 there were -- I was getting a lot of different
24 opinions about Java runtime and what Sun was doing
25 and what we should do. I wouldn't say that I
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1 believed firmly that it was a competitive threat
2 because that all depended on what Sun was doing, what
3 other companies were doing, and what we were going to
4 do. By late '96 I think we had -- or I had a view
5 that what Sun was doing was a competitive activity.
6 Q. BY MR. BOIES: When you talk about
7 having a view that what Sun was doing was a
8 competitive activity, do you use the term "activity"
9 to mean the same thing that you meant before when you
10 used the term "threat"?
11 A. You were the one who used the term
12 "threat." I'm not quite sure. It was competitive.
13 Is something that is competitive always a competitive
14 threat? I'm not sure.
15 Q. Mr. Gates, I think the record will
16 show, and if necessary we can go back to it, that you
17 used the term "Java runtime threat." Do you recall
18 doing that?
19 A. Yes.
20 Q. Okay. Now --
21 A. That's not the same as competitive
22 threat.
23 Q. Well, when you used the Java runtime
24 threat phrase, what did you mean by threat?
25 A. I meant that it was competitive.
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1 Q. And so you were using, in that context,
2 threat and competitive to mean the same thing?
3 A. Yes.
4 Q. Okay. Now, using threat in the same
5 sense that you were using it to mean competitive, I
6 want to ask what you said was the different question
7 from what you believed. When did you conclude that
8 the Java runtime threat was a competitive threat to
9 Microsoft?
10 A. By late '96 I thought of it as
11 competitive.
12 Q. And when you use the word "thought"
13 there, are you using it to mean what you have said
14 you meant by believe as well as what you said you
15 meant by conclude?
16 A. I mean by then it was pretty clear to
17 me it was another thing we had to think of in terms
18 of the list of the competitors, as opposed to earlier
19 where I wasn't sure of that.
20 Q. What did you do to try to respond to
21 what you have described as the Java runtime threat?
22 A. The same thing we always do, just
23 innovate in our products and use the customer
24 feedback to delight them so that they choose to
25 license our products.
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1 Q. Did you do anything else to try to
2 respond to what you described as the Java runtime
3 threat?
4 A. Well, we try to understand from
5 customers what they're doing and how our strategy
6 might appeal versus someone else's strategy and then
7 go back and look at our strategy to see if we can
8 make it better.
9 Q. Did you do anything else?
10 A. I'm not sure what you mean. I mean our
11 whole activity here, everything we do really comes
12 under what I just described.
13 Q. Everything Microsoft does comes under
14 what you've described; is that your testimony, sir?
15 A. Uh-huh.
16 Q. Well, sir, does trying to undermine Sun
17 come within the activity that you've just described?
18 MR. HEINER: Objection.
19 THE WITNESS: I don't know what you
20 mean by that.
21 Q. BY MR. BOIES: You don't?
22 A. No.
23 Q. Have you ever had discussions within
24 Microsoft about the desirability of trying to
25 undermine Sun because of what Sun was doing in Java?
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1 A. I said to you part of our activity is
2 to go out and work with customers to see what it
3 takes to have them choose to license our products.
4 And that's in competition with many other companies,
5 including Sun.
6 MR. BOIES: Would you read back the
7 question, please.
8 (Record read.)
9 THE WITNESS: We've certainly had
10 discussions about making our products better than
11 Sun's and other competitors in any area that people
12 might think of them as desirable.
13 MR. BOIES: Would you read the question
14 back, please.
15 (Record read.)
16 MR. HEINER: Mr. Gates, there is no
17 question pending now. Mr. Boies is having the court
18 reporter read back repeatedly the same question, but
19 there is no question actually pending at the moment.
20 MR. BOIES: The question that was read
21 back is pending, Mr. Heiner.
22 THE WITNESS: I answered that question.
23 MR. BOIES: Would you read back the
24 question and the answer.
25 (The record was read as follows:
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1 "Q. Have you ever had discussions
2 within Microsoft about the desirability of
3 trying to undermine Sun because of what Sun
4 was doing in Java?
5 A. I said to you part of our activity
6 is to go out and work with customers to see
7 what it takes to have them choose to license
8 our products. And that's in competition with
9 many other companies, including Sun.")
10 Q. BY MR. BOIES: I'm not now talking
11 about what you do in competition with other products
12 or other companies. What I'm talking about is
13 whether or not you've had discussions with people
14 within Microsoft in which you talked about the need
15 to undermine Sun, using those words, if that will
16 help you, within Microsoft?
17 A. I don't remember using those words.
18 Q. You don't?
19 A. No.
20 Q. Do you think you did use those words or
21 you just don't know one way or the other?
22 A. I don't know.
23 Q. Would it be consistent with the way you
24 felt about Java for you to have told people that you
25 wanted to undermine Sun?
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1 A. As I've said, anything about Java
2 you've got to show me a context before I can answer
3 because just the term Java itself can mean different
4 things.
5 Q. Well, let me try to approach it this
6 way, Mr. Gates. Have you ever told anyone,
7 regardless of what you meant by it, that you wanted
8 to undermine Java or undermine Sun or undermine Java
9 because of Sun, any of those?
10 MR. HEINER: And to be completely
11 precise, the actual question is merely whether the
12 witness recalls using that particular word,
13 regardless of meaning, just that word?
14 MR. BOIES: Yes. And if he does
15 recall, I'll ask him what he meant by it.
16 MR. HEINER: I understand.
17 THE WITNESS: I said I don't recall
18 using that word.
19 Q. BY MR. BOIES: Would it have been
20 consistent with the way that you felt about Sun and
21 about Java for you to have used that word?
22 And if you don't understand the
23 question, I'll rephrase it.
24 A. Well, Sun's message to the market and
25 ours aren't the same and so there is, as part of that
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1 competition, a desire to get people to understand our
2 message and what we're providing versus their message
3 and what they're providing. So in that sense there
4 could have been a discussion around that topic. But
5 I still don't know if the word "undermine" was ever
6 used.
7 Q. Did you have discussions with Apple
8 that were directed towards attempting to reduce or
9 eliminate competition, Mr. Gates?
10 MR. HEINER: Objection.
11 THE WITNESS: No.
12 Q. BY MR. BOIES: Did you have discussions
13 with Apple in which you were trying to get Apple to
14 agree to help you undermine Sun?
15 A. There was some discussion about what
16 runtime APIs Apple would support, whether they would
17 support some of ours or some of Sun's. I don't think
18 I was involved in any discussions myself with Apple
19 about that.
20 Q. Well, let me show you a document and
21 try to probe what you mean by being involved. Let me
22 give you a copy of a document that has been
23 previously marked as Government Exhibit 365.
24 A portion of this document is an e-mail
25 message from you to Paul Maritz and others and the
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1 portion I'm particularly interested in, and you can
2 read as much of the three-line e-mail as you wish, is
3 the last sentence, which reads, "Do we have a clear
4 plan on what we want Apple to do to undermine Sun?"
5 Did you send this e-mail, Mr. Gates,
6 on or about August 8, 1997?
7 A. I don't remember sending it.
8 (The document referred to was marked
9 by the court reporter as Government Exhibit 365 for
10 identification and is attached hereto.)
11 Q. BY MR. BOIES: Do you have any doubt
12 that you sent it?
13 A. No. It appears to be an e-mail I sent.
14 Q. You recognize that this is a document
15 produced from Microsoft's files, do you not, sir?
16 A. No.
17 Q. You don't?
18 A. Well, how would I know that?
19 Q. Do you see the document production
20 numbers down at the bottom?
21 A. I have no idea what those numbers are.
22 Q. Do you recognize this as the form in
23 which e-mail has been printed out by Microsoft?
24 A. I don't know what that means. It's --
25 all e-mail printed by anyone looks just like this, so
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1 the fact that it looks like this doesn't give you any
2 clue as to who printed it.
3 Q. Let's begin with that, sir. E-mail
4 printed out by other people are not stamped with
5 Microsoft confidential stamps and Microsoft document
6 production numbers; you would agree with that, would
7 you not?
8 A. That has nothing to do with printing
9 out.
10 Q. Do you understand my question, sir?
11 A. No.
12 Q. Do you see down at the bottom where
13 there are confidential stamps and a stamp that says
14 "Attorneys Only" and document production stamps? Do
15 you see those?
16 A. I see the stamps. I can't characterize
17 whether they're document production stamps. To me
18 they look more like what you'd see on a prisoner's
19 uniform.
20 Q. So that you don't have any knowledge
21 about these stamps; is that your testimony?
22 A. I've never seen a stamp like that.
23 I've used a stamp like that.
24 Q. Haven't you seen stamps like that on
25 every single one of the documents you've been shown
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1 during this deposition?
2 A. Can you get me all the exhibits?
3 MR. NEUKOM: Is this a good use of
4 time, Counsel?
5 MR. BOIES: Well, when he says he has
6 never seen them before --
7 THE WITNESS: You asked about this
8 stamp.
9 MR. BOIES: -- and, you know, that he
10 has never seen the stamp before and he's been shown
11 40 documents --
12 MR. NEUKOM: It's just a waste of time.
13 MR. BOIES: It is a waste of time. And
14 I think it's absolutely clear who the witness is --
15 MR. NEUKON: Let's get on with it and
16 have a deposition, shall we?
17 MR. BOIES: We're trying to have a
18 deposition.
19 THE WITNESS: Can we look at that one?
20 Q. BY MR. BOIES: Yes. The one that has
21 this document production stamp and the confidential
22 stamp in the bottom right-hand corner; is that the
23 one you mean, Mr. Gates?
24 A. Is that a stamp? To me that's not a
25 stamp.
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1 MR. HEINER: Let's move on.
2 MR. BOIES: Mr. Heiner, I understand
3 why you want to move on.
4 MR. HEINER: Relax, relax. There must
5 be some way to break through.
6 MR. BOIES: I think there must be.
7 MR. HEINER: Let's try a different
8 question.
9 MR. BOIES: I think there must be, but
10 part of what I want to do is I want to get on the
11 record the way this witness answers questions. I
12 think I'm entitled to do that.
13 MR. HEINER: The witness already
14 testified that this appears to be an e-mail he sent,
15 but he doesn't recall sending it. That's what you
16 need, that's what you have. He's not familiar with
17 the discovery process of some paralegal. That's the
18 testimony right now. And that's not important.
19 MR. BOIES: Part of the testimony was
20 he had never seen the stamp before when he's seen it
21 40 times in this deposition. And I think that goes
22 to this witness's credibility and I think this
23 witness's credibility is an important issue in this
24 case.
25 MR. HEINER: You don't care about
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1 stamps.
2 MR. BOIES: I don't care about stamps.
3 What I care about is credibility and whether the
4 witness is being forthright in his answers and I
5 think I'm entitled to test that when he says things
6 that are as remarkable as the fact that he has never
7 seen a document production stamp like this before in
8 this case after how long the case has gone on.
9 MR. HEINER: You're not going to stand
10 up in court and talk about stamps.
11 MR. BOIES: You're probably right about
12 that.
13 Q. Let me go back to the e-mail,
14 Mr. Gates. What did you mean when you asked
15 Mr. Maritz whether or not, "We have a clear plan on
16 what we want Apple to do to undermine Sun"?
17 A. I don't remember.
18 Q. Did you personally participate in any
19 conversations with Apple in 1997 and 1998?
20 A. Of any kind?
21 Q. Let me be a little more specific. Did
22 you participate in any conversations with Apple in
23 1997 or 1998 concerning what Apple would or would not
24 do that would affect Microsoft competitively?
25 A. Well, there were some conversations
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1 with Steve Jobs about Microsoft Office and some --
2 and a relationship we formed around that and some
3 other issues.
4 Q. And did you participate in those
5 conversations?
6 A. I talked to Steve Jobs on the phone
7 I think twice.
8 Q. And what was the nature of your
9 conversations with Mr. Jobs?
10 A. Well, Steve had -- Steve called me up
11 and said that he had become the CEO of Apple, sort
12 of, and that Gil Amelio wasn't the CEO of Apple. And
13 he raised the question of was there some beneficial
14 agreement that we could enter into different than
15 we'd been discussing with Gil. And it wasn't a very
16 long call and the conclusion was that Greg Maffei
17 would go see Steve.
18 Q. What is Mr. Maffei's title?
19 A. At that time?
20 Q. What is his title today?
21 A. His title today is CFO.
22 Q. Of Microsoft?
23 A. Uh-huh.
24 Q. Chief financial officer?
25 A. Uh-huh.
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1 Q. And what was his title at the time?
2 A. I think treasurer.
3 Q. When did Mr. Maffei go to talk to
4 Mr. Jobs?
5 A. I don't recall the date.
6 Q. Approximately?
7 A. Sometime in '97.
8 Q. This was after your conversation with
9 Mr. Jobs?
10 A. Yes.
11 Q. Did you have any conversation with
12 Mr. Jobs or anyone else at Apple after your 1997
13 conversation with Mr. Jobs?
14 A. I had a brief conversation with him
15 again in '97 the night before a Mac World speech that
16 he was giving where I appeared as part of that
17 speech. But it was about my role in his speech.
18 Q. I'm going to leave that aside.
19 A. Well, it all relates to the agreement
20 with Apple.
21 Q. Okay, then I won't leave it aside.
22 What did you say to him and what did he say to you
23 about the agreement with Apple?
24 A. I said, "It's not signed yet. What are
25 we going to do about this presentation if it doesn't
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1 get signed?" And he said he hoped it would be
2 signed. And then we talked about the logistics of
3 appearing by video conference in the middle of his
4 speech.
5 Q. Have you completed your answer?
6 A. Yes.
7 Q. Other than the two telephone -- or I
8 guess one telephone conversation and one in person --
9 was the brief conversation you've just recounted the
10 one in person?
11 A. No, that was on the phone. He was in
12 Boston, I was in Seattle. That's why I had to do a
13 video conference to be in his speech.
14 Q. So both of your conversations with
15 Mr. Jobs in 1997 were by telephone; is that correct?
16 A. There may have also been some e-mail
17 between Steve and I. I don't think there were any
18 more phone calls, but the two I described were both
19 phone calls. There were no face-to-face meetings
20 that I remember.
21 Q. Other than the two telephone calls and
22 leaving e-mail aside, did you have any conversations
23 either by telephone or in person with any
24 representative of Microsoft in 1997 or 1998?
25 A. Yes.
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1 MR. HOUCK: You misspoke. You said
2 Microsoft and I think you meant Apple.
3 Q. BY MR. BOIES: Other than the two
4 telephone conversations with Mr. Jobs that you have
5 already identified, during 1997 or 1998 did you have
6 any conversations by telephone or in person with any
7 representative of Apple?
8 A. I'm trying to think when Heidi Roizen
9 quit Apple. I think she quit by '97, but I'm not
10 sure. Yeah, I'm pretty sure she quit by then, so no,
11 I don't think so.
12 Q. Do I take it from that answer that you
13 had a conversation with Heidi Roizen?
14 A. At some point in time that I can't
15 remember, yes.
16 Q. And do I also take it that at some
17 point Heidi Roizen left Apple?
18 A. That's right.
19 Q. And that your conversation with Heidi
20 Roizen was while she was at Apple?
21 A. Not all of my conversations with her,
22 but the ones that I thought would be responsive to
23 your questions related to the time of her employ at
24 Apple. I've had other conversations with Heidi
25 Roizen both before she worked at Apple and after she
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1 worked at Apple.
2 Q. Where does she now work?
3 A. She doesn't have a job at this point.
4 Q. Other than your possible conversations
5 during the period with Heidi Roizen and the two
6 telephone conversations in 1997 with Mr. Jobs, did
7 you have any other conversations either by telephone
8 or in person with any representative of Apple in 1997
9 or 1998?
10 A. No, I don't think so.
11 Q. To your knowledge, did any
12 representative of Microsoft have any meetings or
13 telephonic discussions --
14 A. Certainly.
15 Q. -- with any representatives of Apple --
16 A. Certainly.
17 Q. -- in 1998 concerning competitive
18 issues?
19 A. I don't know what you mean by
20 "competitive issues," but there is an ongoing contact
21 with Apple. We're the largest developer of software
22 for the Apple Macintosh and so there is constant
23 discussion with Apple.
24 Q. And as the largest developer of
25 software for the Macintosh, is what you do important
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1 to Apple?
2 A. Sometimes it doesn't seem like it. We
3 always think of it as important, but sometimes they
4 don't treat it that way, sometimes they do.
5 Q. You mentioned discussions with respect
6 to Office. Would you explain for the record what
7 you're talking about there.
8 A. Microsoft Office.
9 Q. Microsoft Office for Macintosh?
10 A. Yes.
11 Q. And was it your understanding that
12 Microsoft Office for Macintosh was believed by Apple
13 to be very important to them?
14 A. I really have a hard time testifying
15 about the belief of a corporation. I really don't
16 know what that means.
17 Q. Well, sir, in making the decisions as
18 to what you would ask of Apple, did you believe that
19 what you were offering Apple with respect to
20 Microsoft Office for Macintosh was important enough
21 to Apple so that they ought to give you something for
22 it?
23 A. I have no idea what you're talking
24 about when you say "ask."
25 Q. Well, let me show you a document that
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1 has been previously marked as Government Exhibit 366.
2 This is a document bearing Microsoft document
3 production stamps MS98 0110952 through 53.
4 (The document referred to was marked
5 by the court reporter as Government Exhibit 366 for
6 identification and is attached hereto.)
7 Q. BY MR. BOIES: The first part of this
8 purports to be a copy of an e-mail from Don Bradford
9 to Ben Waldman with a copy to you, Mr. Maritz and
10 others on the subject of "Java on Macintosh/IE
11 Control."
12 Did you receive a copy of this e-mail
13 on or about February 13, 1998?
14 A. I don't know.
15 Q. Do you have any reason to doubt that
16 you received a copy of this e-mail?
17 A. No.
18 Q. The first paragraph reads, "Apple wants
19 to keep both Netscape and Microsoft developing
20 browsers for Mac -- believing if one drops out, the
21 other will lose interest (and also not really wanting
22 to pick up the development burden.) Getting Apple to
23 do anything that significantly/materially
24 disadvantages Netscape will be tough. Do agree that
25 Apple should be meeting the spirit of our cross
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1 license agreement and that MacOffice is the perfect
2 club to use on them."
3 Do you have an understanding of what
4 Mr. Bradford means when he refers to MacOffice as
5 "the perfect club to use on Apple"?
6 A. No.
7 Q. The second sentence of that paragraph,
8 the one that reads, "Getting Apple to do anything
9 that significantly/materially disadvantages Netscape
10 will be tough." Was it your understanding in
11 February of 1998 that Microsoft was trying to get
12 Apple to do something to disadvantage Netscape?
13 A. No.
14 Q. Do you know why Mr. Bradford would have
15 written this in February of 1998 and sent a copy to
16 you?
17 A. I'm not sure.
18 Q. Did you ever say to Mr. Bradford in
19 words or substance in February of 1998 or thereafter,
20 "Mr. Bradford, you've got it wrong, we're not out to
21 significantly or materially disadvantage Netscape
22 through Apple"?
23 A. No.
24 Q. Did you ever tell Mr. Bradford or
25 anyone else in February, 1998 or thereafter, that
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1 they should not be trying to get Apple to do things
2 that would significantly or materially disadvantage
3 Netscape?
4 A. No.
5 Q. What was Mr. Bradford's position in
6 February of 1998?
7 A. I think he had a small group in
8 California that worked -- I'm not sure who he worked
9 for. He probably worked for somebody who worked for
10 Silverberg or -- no. No, I'm not sure who he worked
11 for.
12 Q. Let's begin with what company he worked
13 for. He clearly worked for Microsoft; correct, sir?
14 A. That's right.
15 Q. Do you know what his title was?
16 A. No.
17 Q. Do you know who Mr. Waldman is?
18 A. Yes.
19 Q. What was his title in February of 1998?
20 A. I don't know.
21 Q. What were his responsibilities in
22 February of 1998?
23 A. He was -- he ran a group that was doing
24 Macintosh software.
25 Neither of these guys have a title like
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1 vice-president. That I can say for sure. They have
2 a title like engineer or software engineer, software
3 engineer manager, but I don't know their titles.
4 They're not executives.
5 Q. In addition to you and Mr. Maritz,
6 copies of this go to David Cole, Dave Reed, Charles
7 Fitzgerald and Jon DeVaan. Do you know what
8 Mr. Cole's position was in 1998?
9 A. Yes.
10 Q. What was it?
11 A. He was the VP -- actually, I don't know
12 VP of what, but he was a VP working for -- I don't
13 know if we reorganized by then. He was in Maritz's
14 organization somewhere.
15 Q. What was Mr. Reed's position at that
16 time?
17 A. I have no familiarity with Mr. Reed.
18 Q. Do you have any familiarity with
19 Mr. Fitzgerald and Mr. DeVaan?
20 A. Yes.
21 Q. What were their positions?
22 A. Charles Fitzgerald was in the
23 evangelism group working for Todd Nielson.
24 Q. And Mr. DeVaan?
25 A. Mr. DeVaan was managing the overall
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1 Office development.
2 Q. Did you have any conversations with
3 anyone within Microsoft as to what position Microsoft
4 should take with Apple in terms of what Microsoft
5 should ask Apple for in return for Microsoft
6 developing Mac Office?
7 A. What time frame are you in?
8 Q. 1997 or 1998.
9 A. Well, it actually makes a big
10 difference. We reached an agreement with Apple in
11 1997 and there's no -- I'm not aware of any agreement
12 other than the 1997 one.
13 MR. BOIES: Could I have the question
14 read back.
15 (The record was read as follows:
16 "Q. Did you have any conversations
17 with anyone within Microsoft as to what
18 position Microsoft should take with Apple in
19 terms of what Microsoft should ask Apple for
20 in return for Microsoft developing Mac
21 Office?")
22 THE WITNESS: I'm not sure what you're
23 saying about Mac Office. We developed Mac Office
24 because it's a profitable business for us.
25 Q. BY MR. BOIES: Well, you threatened to
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1 cancel Mac Office, did you not, sir?
2 A. No.
3 Q. You never threatened Apple that you
4 were going to cancel Mac Office; is that your
5 testimony?
6 A. That's right.
7 Q. Did you ever discuss within Microsoft
8 threatening Apple that you were going to cancel Mac
9 Office?
10 A. You wouldn't cancel -- no.
11 Q. Let me show you a copy of a document
12 that we are marking as Government Exhibit 367. This
13 is another document bearing document production
14 numbers from the Microsoft document production.
15 The second item on the first page
16 purports to be an e-mail message from Ben Waldman to
17 you --
18 A. No.
19 Q. -- dated June 27, 1997.
20 A. It's not to me.
21 (The document referred to was marked
22 by the court reporter as Government Exhibit 367 for
23 identification and is attached hereto.)
24 Q. BY MR. BOIES: Well, the one I'm
25 looking at says from Ben Waldman, sent February 27,
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1 1997, 1:56 a.m. to Bill Gates, cc John DeVaan.
2 A. I must be on the wrong page.
3 Q. Very first page, second item.
4 MR. HEINER: We have something
5 different.
6 MR. NEUKOM: There is some confusion.
7 MR. BOIES: Okay. Let me try to be
8 sure we have the right document. I will refer to it
9 by document production numbers so that we're clear.
10 Let me mark as Government Exhibit 368
11 a document that bears document production stamp
12 98 0113394 through 97.
13 (The document referred to was marked
14 by the court reporter as Government Exhibit 368 for
15 identification and is attached hereto.)
16 Q. BY MR. BOIES: Now, let me direct your
17 attention to the second item on the first page of
18 this exhibit. And this purports to be an e-mail from
19 Mr. Waldman to you dated June 27, 1997; is that
20 correct, sir?
21 A. The second one, uh-huh.
22 Q. You have to answer audibly yes or no,
23 Mr. Gates.
24 A. Yes, the second one.
25 Q. Now, in the second paragraph of this
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1 e-mail to you, the second sentence reads, "The threat
2 to cancel Mac Office 97 is certainly the strongest
3 bargaining point we have, as doing so will do a great
4 deal of harm to Apple immediately."
5 Do you see that, sir?
6 A. Uh-huh.
7 Q. Do you recall receiving this e-mail in
8 June of 1997?
9 A. Not specifically.
10 Q. Do you have any doubt that you received
11 this e-mail in June of 1997?
12 A. No.
13 Q. Do you know why Mr. Waldman wrote you
14 in June of 1997 that, "The threat to cancel Mac
15 Office 97 is certainly the strongest bargaining point
16 we have, as doing so will do a great deal of harm to
17 Apple immediately"?
18 A. Well, Mr. Waldman was in charge of this
19 update. And the Mac Office product had been shipping
20 for over a decade by now. And there was a financial
21 question of whether to do this update and he felt it
22 made good business sense to do it. Other people,
23 irrespective of the relationship with Apple, had said
24 that it didn't make sense to do the update. And so
25 there was some mail from Ben, including this one,
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1 where he was saying he thought we should go ahead and
2 finish the product. I'm not sure what he means about
3 the negotiations with Apple. I'm not sure what we
4 were negotiating with Apple at this point.
5 Q. Was this the time that you were
6 negotiating with Apple to try to find out what you
7 could get Apple to do to undermine Sun?
8 A. Well, the only e-mail -- the only thing
9 you've shown me where that term was used is after we
10 reached a Mac Office agreement with Apple.
11 Q. You're referring to your e-mail dated
12 August 8, 1997; is that correct?
13 A. That's right.
14 Q. That has been marked as Exhibit 365; is
15 that correct?
16 A. That's right. That's after.
17 Q. That's August 8, 1997?
18 A. That's right.
19 Q. And it is clear from your August 8,
20 1997 memo that you are still attempting to get Apple
21 to do additional things, is it not, sir?
22 A. No.
23 Q. Well, sir, let's read it. It's only
24 three lines. You write, "I want to get as much
25 mileage as possible out of our browser and Java
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1 relationship here."
2 And when you talk about "here," you're
3 talking about with Apple, are you not, sir?
4 A. I'm not sure.
5 Q. Well, the subject of this is "FW:
6 Post-agreement"; correct, sir?
7 A. Yeah. That's what makes me think this
8 was probably post-agreement.
9 Q. Post-agreement with Apple; right?
10 A. Yes.
11 Q. So the subject is post-agreement with
12 Apple, and the very first sentence is, "I want to get
13 as much mileage as possible out of our browser and
14 Java relationship here." Second sentence says, "In
15 other words, a real advantage against Sun and
16 Netscape." Third line says, "Who should Avie be
17 working with? Do we have a clear plan on what we
18 want Apple to do to undermine Sun?"
19 Now, do you have any doubt that when
20 you talk about, "I want to get as much mileage as
21 possible out of our browser and Java relationship
22 here," you're talking about Apple?
23 A. That's what it appears.
24 Q. Do you have any recollection of any
25 discussions about the subject matter of this e-mail
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1 in or about August of 1997?
2 If the question is confusing, I'd be
3 happy to rephrase it, Mr. Gates.
4 A. Go ahead.
5 Q. Did you send this e-mail?
6 A. It appears I did.
7 Q. Did you discuss this e-mail with
8 anyone?
9 A. I don't remember that.
10 Q. Let me go back to Exhibit 368, which is
11 the June 27, 1997 e-mail from Mr. Waldman to you. Do
12 you recall -- and I know you've said you don't recall
13 receiving this e-mail, but do you recall anyone
14 describing the threat to cancel Mac Office 97 as a
15 bargaining point that you had in dealing with Apple
16 in or about June of 1997?
17 A. I remember going to meetings where Paul
18 Maritz took the position that we shouldn't do the
19 update, the Mac Office 97 update. And the main
20 negotiation we had with Apple at that point was a
21 discussion about a patent cross license. And so I
22 said to Paul I wanted to understand better where we
23 were on the patent cross license and understand the
24 state of the Mac Office development. And then it
25 appears that this is an e-mail that is coming after
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1 that meeting. I don't remember somebody using those
2 exact words.
3 Q. Whether you remember somebody using the
4 exact words that Mr. Waldman uses in his June 27,
5 1997 e-mail to you, do you remember people telling
6 you in substance that the threat to cancel Mac Office
7 97 was a strong bargaining point that you had against
8 Apple and that cancelling Mac Office 97 would do a
9 great deal of harm to Apple immediately?
10 A. I know there was the internal debate
11 about whether to do the update. And I know there was
12 the patent discussion going on. And I said that
13 maybe even if it didn't make business sense to do the
14 update, maybe as part of an overall relationship with
15 the patent cross license, that we should go ahead and
16 do it. And so a commitment to do the upgrade was one
17 of the things that we told Apple we might commit to
18 as part of the patent cross license relationship.
19 Q. And did you believe in 1997 that
20 cancelling Mac Office 97 would do a great deal of
21 harm to Apple, as Mr. Waldman writes it would?
22 A. There was a question about whether to
23 do the upgrade and whether it made business sense. I
24 can't really say how much impact it would have on
25 Apple of us doing the upgrade or not. Certainly Ben,
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1 as the person in charge of the upgrade, was very
2 passionate about its importance and its dramatic
3 nature.
4 Q. My question to you now, sir, is whether
5 you believed that cancelling Mac Office 97 would do a
6 great deal of harm to Apple?
7 A. Well, I know that Apple would prefer
8 that we have a more updated version of Mac Office,
9 that that would be a positive thing for them, and so
10 that's why it was part of the negotiation relative to
11 the patent cross license.
12 Q. And did you believe that cancelling Mac
13 Office 97 would do a great deal of harm to Apple?
14 A. I told you I think it would be better
15 for Apple to have everybody doing major upgrades like
16 this. I doubt -- I can't characterize the level of
17 benefit of the upgrade to Apple, but certainly it's
18 something they wanted us to complete.
19 Q. The next sentence in Mr. Waldman's
20 June 27, 1997 e-mail to you begins, "I also believe
21 that Apple is taking this threat pretty seriously."
22 Did someone tell you in or about June
23 of 1997 that Apple was taking Microsoft's threat to
24 cancel Mac Office 97 seriously or pretty seriously?
25 A. Well, Maritz had taken the position
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1 that it didn't make business sense to finish this
2 upgrade. And it's very possible Apple might have
3 heard about Maritz's opinion there and therefore been
4 worried that we, businesswise, didn't see a reason to
5 complete the upgrade and that they would have the
6 older Mac Office as opposed to this new work that we
7 were part way along on.
8 Q. Mr. Gates, my question is not what
9 position Mr. Maritz did or did not take. My question
10 is whether anyone told you in or about June of 1997
11 that Apple was taking pretty seriously Microsoft's
12 threat to cancel Mac Office 97?
13 A. Apple may have known that senior
14 executives at Microsoft, Maritz in particular,
15 thought that it didn't make business sense to
16 complete that upgrade.
17 Q. Mr. Gates, I'm not asking you what
18 Apple may have known or may not have known. What I'm
19 asking you is whether anybody told you in or about
20 June of 1997 that Apple was taking pretty seriously
21 Microsoft's threat to cancel Mac Office 97?
22 A. Those particular words?
23 Q. Told you that in words or in substance.
24 A. I think I remember hearing that Apple
25 had heard about Maritz's view that it didn't make
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1 sense to continue the upgrade, but -- and that, you
2 know, they wanted us to continue the upgrade. But
3 I -- I don't remember any of the -- it being phrased
4 at all the way you're phrasing it.
5 Q. Well, the way I'm phrasing it is the
6 way that Mr. Waldman phrased it to you in his e-mail
7 of June 27, 1997; correct, sir?
8 A. Well, in reading it, I see those words,
9 yes.
10 Q. And you don't have any doubt that you
11 received this e-mail, do you, sir?
12 A. I have no reason to doubt it. I don't
13 remember receiving it. I do remember in general
14 sending an e-mail like the one that's at the top
15 there.
16 Q. Do you recall anyone telling you in
17 words or in substance in or about June of 1997 what
18 Mr. Waldman is writing here in this e-mail?
19 MR. HEINER: Objection.
20 THE WITNESS: This is a very long piece
21 of e-mail. Have you read the whole e-mail yourself?
22 MR. BOIES: I think my question was
23 imprecise. I was trying to avoid quoting something
24 for yet another time, but I accept your counsel's
25 view that the question was probably defective. I
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1 thought it was clear what portion of the e-mail we
2 were talking about, but I will make it clear.
3 Q. Mr. Gates, Mr. Waldman on June 27,
4 1997, sends you an e-mail that says, "The threat to
5 cancel Mac Office 97 is certainly the strongest
6 bargaining point we have, as doing so will do a great
7 deal of harm to Apple immediately. I also believe
8 that Apple is taking this threat pretty seriously."
9 Do you recall anyone --
10 A. Do you want to finish the sentence or
11 not?
12 Q. You can if you think it is necessary to
13 answer the question.
14 Do you recall anyone telling you what I
15 have just quoted in words or in substance in or about
16 June, 1997?
17 A. No.
18 MR. HEINER: It's just about 10:00 now.
19 Can we take a break?
20 MR. BOIES: If you wish.
21 MR. HEINER: Yes, thanks.
22 VIDEOTAPE OPERATOR: The time is 9:57.
23 We're going off the record.
24 (Recess.)
25 VIDEOTAPE OPERATOR: The time is 10:21.
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1 We are going back on the record.
2 Q. BY MR. BOIES: What were the primary
3 goals that you personally had, Mr. Gates, in terms of
4 getting Apple to agree to things?
5 MR. HEINER: Objection. Can you be
6 just a bit more specific on that?
7 MR. BOIES: Sure.
8 Q. In the period of 1996 forward, after
9 you concluded that Java, or as you put it, Java
10 runtime threat and Netscape were competitive threats
11 to Microsoft, what were your goals in terms of
12 dealing with Apple? What were you trying to get
13 Apple to agree to do for Microsoft?
14 A. Well, the main reasons we were having
15 discussions with Apple in this '97 period was that
16 they had asserted that various patents that they had
17 applied to various Microsoft products, and so our
18 primary focus in discussing an agreement with them
19 was to conclude a patent cross license of some kind.
20 Q. I want to be sure that the question and
21 answer are meeting. I asked for a period of 1996 to
22 the present and you answered about 1997. Were your
23 goals in 1996 or after 1997 any different than the
24 goals that you've just described in dealing with
25 Apple?
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1 A. There's only one agreement with Apple,
2 so I don't know what you're talking about.
3 Q. Okay. Do you understand the word goals
4 or objectives?
5 A. You talked about agreeing with Apple --
6 there's only one agreement with Apple that I know
7 about that we're discussing and that was one that was
8 concluded in I think late July or early August, 1997
9 and there's no other agreement that I know was even
10 discussed or considered.
11 Q. Okay. Let me ask you to look at a
12 document previously marked as Government Exhibit 369.
13 The second item on the first page of this exhibit
14 purports to be an e-mail from you dated June 23, 1996
15 to Paul Maritz and Brad Silverberg with copies to
16 Messrs. Higgins, Bradford, Waldman and Ludwig on the
17 subject of "Apple meeting."
18 (The document referred to was marked by
19 the court reporter as Government Exhibit 369 for
20 identification and is attached hereto.)
21 Q. BY MR. BOIES: Did you send this
22 e-mail, Mr. Gates, on or about June 23, 1996?
23 A. I don't remember it specifically, but I
24 don't have any reason to doubt that I did.
25 Q. In the second paragraph you say, "I
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1 have 2 key goals in investing in the Apple
2 relationship - 1) Maintain our applications share on
3 the platform and 2) See if we can get them to embrace
4 Internet Explorer in some way."
5 Do you see that?
6 A. Yeah.
7 Q. Does that refresh your recollection as
8 to what your two key goals were in connection with
9 Apple in June of 1996?
10 A. First of all, June of 1996 is not in
11 the time frame that your previous question related
12 to. And certainly in the e-mail to this group I'm
13 not talking about the patent thing, but believe me,
14 it was our top goal in thinking about Apple for many,
15 many years because of their assertions.
16 Q. My time frame in my question, sir, was
17 a time frame beginning in 1996 when you began to view
18 Netscape or the Java runtime threat as a competitive
19 threat to Microsoft.
20 A. And that was after June of 1996.
21 Q. Is it your testimony that in June of
22 1996 you did not consider Netscape to be a
23 competitive threat to Microsoft?
24 A. Netscape was a competitor, but in terms
25 of Java and all the runtime related issues, we didn't
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1 have a clear view of that at all.
2 Q. So that -- I want to be sure I've got
3 your testimony accurately. It is your testimony that
4 in June of 1996 you considered Netscape to be a
5 competitive threat but you did not consider Java or
6 Java runtime to be a competitive threat; is that your
7 testimony?
8 A. We considered Netscape to be a
9 competitor and I told you earlier that until late '96
10 we were unclear about our position on various Java
11 runtime things and what other companies were doing
12 and what that meant for us competitively.
13 Q. Do you agree that in June of 1996 the
14 two key goals that you had in terms of the Apple
15 relationship were, one, maintain your applications
16 share on the platform, and two, see if you could get
17 Apple to embrace Internet Explorer in some way?
18 A. No.
19 Q. Do you have any explanation for why you
20 would have written to Mr. Maritz and Mr. Silverberg
21 on June 23, 1996 that those were your two key goals
22 in the Apple relationship?
23 A. They weren't involved in the patent
24 issue at all. So when I write to them, I'm focused
25 on the issues that relate to them. I do mention
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1 patents in here, but that certainly was the primary
2 goal at this time and in subsequent times.
3 Q. Let me be clear. When you write to
4 Mr. Maritz and Mr. Silverberg, you talk about
5 patents, do you not, sir?
6 A. Where do you see that?
7 Q. Well, did you talk about patents?
8 A. Do you want me to read the entire mail?
9 Q. Have you read it enough to know whether
10 you talk about patents?
11 A. I saw the word "patent" in one place.
12 If I read the whole thing, I can find out if it's in
13 other places as well.
14 Q. You do talk about patent cross license,
15 do you not, in this memo? And if you want to look at
16 the last page, five lines from the bottom.
17 A. Yeah. They weren't involved in the
18 patent issues at all, so it looks like in this mail I
19 just mention that in a summary part, but it was our
20 top goal in our discussions with Apple.
21 Q. When you write to Mr. Maritz and
22 Mr. Silverberg, you don't describe that as your top
23 goal, in fact, you don't even describe it as one of
24 your two or three key goals; correct, sir?
25 A. This piece of e-mail doesn't talk about
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1 the patent goal as the top goal. It's most likely
2 that's because the people copied on the mail don't
3 have a thing to do with it and I wouldn't distract
4 them with it.
5 Q. I want to be sure I have your testimony
6 correct. In June of 1996, what was Paul Maritz's
7 title?
8 A. He was involved in product development
9 activities.
10 Q. He was involved in product development
11 activities. What was his title?
12 A. I don't know. Systems.
13 Q. Systems?
14 A. Uh-huh.
15 Q. Did he have a title that went with
16 that?
17 A. Senior vice-president systems. I don't
18 know.
19 Q. Senior vice-president systems, I see.
20 Did Mr. Silverberg have a position in
21 June of 1996?
22 A. He worked for Mr. Maritz.
23 Q. Did he have a title?
24 A. I don't know what his title was at the
25 time. He would have been an officer of some kind.
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1 Q. An officer of some kind.
2 So you're writing a memo to Paul
3 Maritz, a senior vice-president, and Brad Silverberg,
4 an officer of some kind, and you're sending copies to
5 four other people on the subject of the Apple
6 meeting, and you say, "I have 2 key goals in
7 investing in the Apple relationship."
8 A. That's quite distinct than any goals I
9 might have for a deal with Apple. It says, "I have 2
10 key goals in investing in the Apple relationship,"
11 not "I have 2 key goals for a deal with Apple."
12 Q. Well, sir, at the bottom you say what
13 you propose in terms of a deal and you talk about
14 what Apple will get out of the deal and what
15 Microsoft will get out of the deal; correct, sir?
16 A. Do you want me to read you the e-mail?
17 I mean I don't know anything more than just what it
18 says in the e-mail. I'm glad to read it to you.
19 Q. Well, sir, does it say at the bottom of
20 the e-mail that you are proposing something with
21 Apple and you are identifying what Apple would get
22 under your proposed deal and what Microsoft would get
23 under your proposed deal?
24 A. Yeah, that's at the bottom of the
25 e-mail.
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1 Q. In fact, the bottom of the e-mail
2 talking about a proposed Apple-Microsoft deal, you
3 say, "The deal would look like this," and then you've
4 got a column "Apple gets" and a column "Microsoft
5 gets" and a column "Both get"; right, sir?
6 A. I'm reading that.
7 Q. Now, in this e-mail of a page or a page
8 and a half in which you are proposing this deal, you
9 describe your two key goals as maintaining
10 Microsoft's applications share on the platform and
11 getting Apple to embrace Internet Explorer.
12 A. No, that's wrong.
13 Q. That's wrong, okay.
14 A. The word "deal" and the word
15 "relationship" are not the same word. This says, "I
16 have 2 key goals in investing in the Apple
17 relationship." This down here is an agreement which
18 I thought we could reach with Apple.
19 Q. Is it your testimony here today under
20 oath that your two key goals in investing in the
21 Apple relationship, which you mention in the second
22 paragraph of this e-mail, is different than your two
23 key goals in the proposed deal that you describe five
24 paragraphs later?
25 A. I don't see anything in here about the
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1 key goals -- two key goals in the deal. I've told
2 you that I'm certain that my primary goal in any deal
3 was the patent cross license.
4 Q. Mr. Gates, my question is whether it is
5 your testimony today here under oath that when you
6 talk about your two key goals in investing in the
7 Apple relationship in the second paragraph of this
8 e-mail, that that is different than what your key
9 goals were in the deal that you proposed five
10 paragraphs later?
11 A. That's right. Investing in a
12 relationship is different than the deal.
13 Q. Now, you don't tell Mr. Maritz or
14 Mr. Silverberg that your goals for investing in the
15 Apple relationship are different than your goals in
16 the proposed deal, do you, sir?
17 A. But the goals and the deal are quite
18 different, so obviously they would have known they
19 were quite different.
20 Q. Well, sir, you say the goals and the
21 deal are quite different. One of your two key goals
22 that you talk about in your second paragraph is to
23 get Apple to embrace Internet Explorer in some way.
24 And the very first thing under what Microsoft gets in
25 your proposed deal is, "Apple endorses Microsoft
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1 Internet Explorer technology." Do you see that, sir?
2 A. Uh-huh.
3 Q. Now, does that refresh your
4 recollection that the deal that you were proposing
5 had some relationship to the two key goals that you
6 were identifying?
7 A. Some relationship, yes, but they aren't
8 the same thing at all.
9 Q. All right, sir.
10 Did you ever prepare any e-mail to
11 anyone, Mr. Maritz or Mr. Silverberg or anyone, in
12 which you said that your primary goal in an Apple
13 deal was obtaining a cross license?
14 A. I don't remember a specific piece of
15 e-mail, but I'm sure I did with at least Mr. Maffei
16 and Mr. Maritz.
17 Q. You're sure you sent them e-mail saying
18 that?
19 A. I'm sure I communicated it to them in
20 some way.
21 Q. Do you believe you sent them anything
22 in writing or an e-mail?
23 A. I think it's likely, but I don't
24 remember a specific document.
25 Q. You certainly haven't seen any such
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1 document in being prepared for your deposition; is
2 that fair?
3 MR. HEINER: Objection. You're not
4 seeking to intrude on the attorney-client privilege?
5 MR. BOIES: No. I want to know if he
6 has seen any such document, this document he says he
7 thinks exists that wasn't produced in document
8 production. I want to see if he has ever seen it, if
9 he recalls ever seeing it now or any other time.
10 THE WITNESS: I didn't say anything
11 about what may or may not exist at this point. I
12 said I'm sure I communicated to Mr. Maritz and
13 Mr. Maffei that our primary goal in doing the deal
14 with Apple was the patent cross license.
15 Q. BY MR. BOIES: And I had thought, and
16 perhaps I misunderstood, I thought that you had said
17 that you believed that you actually communicated that
18 not merely orally but by e-mail or in writing.
19 A. I think it's likely that I communicated
20 it in e-mail.
21 Q. And if you had communicated it in
22 e-mail, would that e-mail have been preserved?
23 A. Not necessarily.
24 Q. A lot of these e-mails were preserved
25 because we now have copies of them; right?
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1 A. That's right.
2 Q. How did Microsoft decide what e-mails
3 would be preserved and what e-mails would not be
4 preserved?
5 A. Individuals get e-mail into their
6 mailbox and they decide.
7 Q. Do you have any explanation as to why
8 people would have decided to keep the e-mail that
9 described your two key goals in the Apple
10 relationship as being what they are stated to be here
11 and not have preserved your e-mail that you say you
12 sent saying you had a primary goal of a cross
13 license?
14 MR. HEINER: Objection. Lack of
15 foundation.
16 THE WITNESS: You're missing --
17 MR. HEINER: Hold it. Objection.
18 Those facts are not established. There could be 100
19 e-mails that talk about a patent cross license and
20 you may have them or you may not have them or they
21 may not have been called for. There is a range of
22 possibilities. That question is unfair and I object.
23 MR. BOIES: Okay, you've made your
24 objection. The witness will now answer the question.
25 MR. HEINER: Let's have it read back.
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1 MR. BOIES: And if you come up with
2 those hundred e-mails, we will read them with
3 interest. I don't think you're going to and you
4 don't think you're going to either.
5 MR. HEINER: I disagree with that.
6 MR. BOIES: Okay.
7 Q. I'll restate the question to just be
8 absolutely certain that it's a fair question,
9 Mr. Gates.
10 If it were the case that neither your
11 counsel nor myself, after diligent search, can find
12 an e-mail that says your primary goal in dealing with
13 Apple was a patent cross license, do you have any
14 explanation as to why that e-mail that you say you
15 think exists would not have been saved, whereas the
16 e-mail that describes one of your two key goals as
17 getting Apple to embrace Internet Explorer was
18 preserved?
19 MR. HEINER: Objection. It's not a
20 sensible question. You asked a hypothetical. How
21 can the witness explain what the facts might be in
22 your hypothetical?
23 MR. BOIES: He is not being asked to
24 explain what the facts are in a hypothetical, I think
25 that's clear. If the witness tells me he cannot
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1 answer the question, he can do so and we will go on
2 and take that up with everything else we'll take up
3 at a subsequent time.
4 THE WITNESS: When you say "dealing
5 with Apple," there were a lot of things we were
6 dealing with Apple on. I've told you in terms of the
7 deal, the deal I was involved in discussing in '96
8 and under another management at Apple in '97, there's
9 no doubt the primary goal was the patent cross
10 license.
11 Q. BY MR. BOIES: And by "the primary
12 goal," what you mean is the primary goal that you,
13 Mr. Gates, had; is that correct?
14 A. I don't think I'm the only one who had
15 it, but certainly yes, that was the primary goal of
16 myself and for the company.
17 Q. And when you said in your June 23, 1996
18 e-mail, "I have 2 key goals in investing in the Apple
19 relationship," you were talking about yourself
20 personally; is that correct?
21 A. Yeah. When I say "investing in the
22 Apple relationship," that means spending time with
23 Apple and growing the relationship.
24 Q. And when in describing the deal five
25 paragraphs later the very first thing that Microsoft
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1 gets is, "Apple endorses Microsoft Internet Explorer
2 technology," did that indicate to you that that was
3 an important part of what you were getting in terms
4 of the deal?
5 A. No such deal was ever struck, so I'm
6 not sure what you're saying.
7 Q. Was that an important part of the deal
8 that you were trying to get, sir?
9 A. We never got as far as trying to get
10 that deal, unfortunately.
11 Q. You never got as far as trying to get
12 that deal; is that what you're saying?
13 A. No. Well, in this time frame Gil
14 Amelio's total focus was on his new OS strategy, so
15 what I outlined here we never got them to consider.
16 Q. Well, sir, your e-mail begins, "Last
17 Tuesday night I went down to address the top Apple
18 executives;" correct, sir?
19 A. That's right.
20 Q. And down at the bottom when you're
21 introducing the deal, you say, "I proposed." Now,
22 you're referring to what you proposed to the Apple
23 top executives, are you not, sir?
24 A. Yes.
25 Q. Okay. And what you proposed was
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1 "the deal" that you then describe at the bottom of
2 the first page and the top of the second page;
3 correct, sir?
4 A. That's right.
5 Q. And that was a deal that you proposed
6 the Tuesday night before June 23, 1996 to what you
7 describe as the top Apple executives; correct, sir?
8 A. I put forward some of those points.
9 Q. Well, you put them forward and you
10 describe them as proposing a deal, correct, sir?
11 A. That's how I describe it here, yes.
12 Q. All right, sir. Now, you'd said that
13 the deal that you were talking about never got done.
14 Did you ever get Apple to endorse Microsoft Internet
15 Explorer technology?
16 A. You're trying to just read part of
17 that?
18 Q. I'm actually -- what I'm doing is
19 asking a question right now, sir. I'm asking whether
20 in 1996 or otherwise, at any time did you get Apple
21 to endorse Microsoft Internet Explorer technology?
22 A. Well, you can get a copy of the
23 agreement we reached with Apple and decide if in
24 reading that you think it meets that criteria or not.
25 Q. Sir, I'm asking you, as the chief
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1 executive officer of Microsoft, I'm asking you
2 whether you believe that you achieved that objective?
3 A. We did not get some exclusive
4 endorsement. We did get some -- there's some part of
5 the deal that has to do with Internet Explorer
6 technology.
7 Q. Do you know what that part of the deal
8 is?
9 A. Not really. It has something to do
10 with they will at least ship it along with other
11 browsers.
12 Q. Does the deal prohibit them from
13 shipping Netscape's browser without also shipping
14 Internet Explorer?
15 A. I'd have to look at the deal to
16 understand.
17 Q. It is your testimony sitting here today
18 under oath that you simply don't know one way or the
19 other whether Apple is today free to ship Netscape's
20 browser without also shipping Internet Explorer?
21 A. That's right.
22 Q. When you identify things as key goals,
23 do you typically tend to follow up and see to what
24 extent those goals have been achieved?
25 A. In a very general sense, yes.
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1 Q. Did you ever follow up to see whether
2 one of the two key goals that you identify in your
3 1996 e-mail to Mr. Maritz and Mr. Silverberg and
4 others of getting Apple to embrace Internet Explorer
5 technology in some way had been achieved?
6 A. Well, certainly what I said here,
7 "I have 2 key goals in investing in the Apple
8 relationship," that -- those weren't achieved because
9 the investments I made were with Gil Amelio, who was
10 fired from Apple very soon thereafter.
11 Q. Was there something about Mr. Amelio
12 getting fired that changed what your goals were for
13 the Apple relationship?
14 A. I said, "I have 2 key goals in
15 investing in the Apple relationship." The form that
16 investment took was spending time with Gil Amelio.
17 That turned out to be wasted time because he was
18 fired from Apple rather abruptly within about, oh,
19 eight months of this.
20 Q. When he was fired, did that change what
21 goals you had for the Apple relationship, Mr. Gates?
22 A. It was basically a complete restart
23 because we had to understand what the new management,
24 what they were going to do with Apple and where they
25 were going.
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1 Q. Did your goals change?
2 A. Goals for what? For investing in the
3 relationship?
4 Q. You say in this e-mail you have two key
5 goals for investing in the Apple relationship. One
6 of --
7 A. In investing in the Apple relationship.
8 Q. One of them is to get Apple to embrace
9 Internet Explorer technology in some way. What I'm
10 asking you is whether that changed after this person
11 got fired?
12 A. We re-evaluated all of our thoughts
13 about working with Apple based on what the new
14 management was going to do, whether they were going
15 to target the machines, what they were going to do
16 with their machines. Since they continued to say we
17 were in violation of their patents, it continued to
18 be our top goal to get some type of patent cross
19 license.
20 MR. BOIES: Would you read the question
21 back, please.
22 (The record was read as follows:
23 "Q. One of them is to get Apple to
24 embrace Internet Explorer technology in some
25 way. What I'm asking you is whether that
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1 changed after this person got fired?")
2 MR. BOIES: Better read the whole
3 question. And then again reincorporate it so that
4 it's clear for the record.
5 (The record was read as follows:
6 "Q. You say in this e-mail you have
7 two key goals for investing in the Apple
8 relationship. One of --
9 A. In investing in the Apple
10 relationship.
11 Q. One of them is to get Apple to
12 embrace Internet Explorer technology in some
13 way. What I'm asking you is whether that
14 changed after this person got fired?")
15 The WITNESS: You keep, either
16 intentionally or unintentionally, trying to confuse
17 my goals for investing in the relationship with the
18 goals we had overall for various dealings with Apple.
19 Certainly the goals I had for investing in the
20 relationship, that I had to start over and rethink
21 because the investment was to spend time with the CEO
22 who had been fired.
23 Q. Mr. Gates, neither in this e-mail nor
24 in any other document that either of us is aware of
25 do you make that distinction that you're making now,
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1 correct?
2 MR. HEINER: Objection.
3 Q. BY MR. BOIES: Do you understand the
4 question I'm asking?
5 A. This document does not say that my
6 goals for dealing -- does not state my goals for
7 dealing with Apple up here. It states my goals in
8 investing in the Apple relationship, so there is a
9 clear distinction right there in that document.
10 Q. Mr. Gates, this document deals with a
11 proposed deal that you made to top Apple executives;
12 correct?
13 A. That's only one part of what is in the
14 document. There's a part where it talks about -- you
15 never mentioned it, but the first goal is "Maintain
16 our applications share on the platform." That's
17 something I'm doing in investing in the Apple
18 relationship and that's not related to the deal
19 that's given -- the proposed deal discussed below in
20 the e-mail, so those are clearly two separate things.
21 Related, but separate.
22 Q. What I think I've done is I think I
23 have mentioned the first goal a number of times.
24 A. I don't think so.
25 Q. I think it's been read about three
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1 times in the record and the record will show it.
2 A. Okay. It's a point of disagreement.
3 Q. Okay.
4 MR. HEINER: But not an important one.
5 MR. NEUKOM: But a time consuming one.
6 MR. BOIES: Exactly the point that I
7 was making, which is why the witness makes those
8 kinds of statements. The --
9 MR. HEINER: It took two to tango just
10 there.
11 MR. BOIES: Yes, it did. And actually
12 it took four of us, three on that side of the table
13 and me.
14 Q. My question, Mr. Gates, has to do with
15 what your goals were, what your stated goals were.
16 Now, you say here, "I have two key goals in investing
17 in the Apple relationship, one of which is to get
18 Apple to embrace Internet Explorer technology in some
19 way."
20 Did that continue to be a goal that you
21 had after 1996?
22 A. It wasn't a goal in investing in the
23 Apple relationship in terms -- in the sense I meant
24 it here. It was a goal for our overall dealing with
25 Apple. One of many.
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1 Q. Okay. Was it a key goal?
2 A. I'm not sure what you mean by key goal.
3 It was a goal.
4 Q. What I mean by key goal is what you
5 meant by key goal in your June 23, 1996 e-mail,
6 Mr. Gates.
7 A. That's about investing in the Apple
8 relationship, which meant spending time with Gill
9 Amelio, so I don't know why you can take the word out
10 of there and apply it to a completely different
11 context.
12 Q. When you say "a completely different
13 context," let's be clear about what we're talking
14 about. The completely different context that you're
15 talking about is the difference between investing in
16 the Apple relationship and doing a deal with Apple;
17 is that what you're saying?
18 A. No. We have goals for our general
19 dealings with Apple, which came to a deal -- we
20 actually reached a deal in either late July, '97 or
21 early August. But there's a separate thing of what
22 was that deal, what we were able to achieve, what we
23 were trying to achieve when we were dealing with the
24 previous management, and what I'm trying to do in
25 terms of spending my time investing in the Apple
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1 relationship.
2 Q. And what you're saying is it is your
3 testimony under oath, although you can't recall
4 actually having sent this e-mail, you're confident
5 when you wrote this and referred to investing in the
6 Apple relationship, you meant only what you expected
7 to get out of spending time with the Apple
8 executives; is that your testimony?
9 A. Yeah. I was explaining why I was
10 spending time with Gill Amelio.
11 Q. And that's all you meant to be saying
12 here is your testimony?
13 A. That's what -- in reading this, that's
14 what I believe I was trying to communicate to the
15 recipients of the e-mail.
16 Q. All right, sir.
17 Let me ask you to look at a document
18 previously marked as Government Exhibit 370. This
19 purports to be an e-mail, and the second item on the
20 e-mail is an e-mail from John Ludwig to Don Bradford
21 dated August 21, 1997. And the subject is
22 "Conversations with BillG last night."
23 And the BillG referred to there is you;
24 correct, sir?
25 A. Yes.
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1 (The document referred to was marked
2 by the court reporter as Government Exhibit 370 for
3 identification and is attached hereto.)
4 Q. BY MR. BOIES: And it begins, "I was at
5 the exec staff meeting last night."
6 Can you explain for the record what the
7 exec staff meeting was?
8 A. He is referring to a regular
9 get-together four times a year of the Microsoft
10 executive staff.
11 Q. And he goes on to say that, "There were
12 three interesting exchanges with Bill and the whole
13 group about Apple." Do you see that?
14 A. I see it.
15 Q. And No. 1 is, "Bill's top priority is
16 for us to get the browser in the October OS release
17 from Apple. We should do whatever it takes to make
18 this happen. If we are getting shut out, we should
19 escalate to Bill. You should make sure that we are
20 engaging deeply with Apple on this one and resolving
21 any and all issues."
22 Do you recall conveying to your
23 executive staff in or about August of 1997 that your
24 top priority was to get Microsoft's browser in the
25 October OS release from Apple?
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1 A. No, I don't recall that.
2 Q. The top e-mail, which is from Don
3 Bradford to a number of people dated August 21, 1997
4 and is also on the subject of "conversations with
5 BillG last night," says that Mr. Bradford and someone
6 else, Mohan Thomas, "will take the lead on working
7 out the Apple bundle deal." Do you see that?
8 A. Yes.
9 Q. Did you instruct your executive staff
10 in or about August of 1997 to work out an "Apple
11 bundle deal"?
12 A. Well, I think this is post the August
13 agreement, late July or early August agreement we
14 reached with Apple. And I think there were some
15 circumstances under which they would include or
16 bundle IE with some of their shipments. I think
17 that's what that's referring to.
18 Q. And is that what your present
19 recollection is that you told your executive staff in
20 August of 1997?
21 A. Well, I don't recall specifically what
22 I said to the executive staff about Apple, but it
23 appears Ludwig took out of that that he was supposed
24 to make sure that whatever outs that Apple had under
25 the previous agreement for not shipping our
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1 technology, that we avoided those being a problem
2 that prevented them from shipping our technology.
3 Q. Well, Apple wasn't prohibited from
4 shipping your technology in August of 1997, was it,
5 sir?
6 A. No, I actually think if we -- I don't
7 know the Apple agreement, I haven't read it, but I
8 think there is something in there that if we got
9 certain things done and if there were no problems and
10 it passed tests and we were ready in time, that they
11 would actually affirmatively include some of our
12 technology in various OS releases. And this appears
13 to be a discussion about whether or not we're going
14 to be able to meet the requirements on us related to
15 that.
16 Q. It is clear that getting the browser in
17 the October OS release from Apple was something that
18 you, Bill Gates, and Microsoft wanted; correct, sir?
19 A. Yes, that's something that we wanted.
20 Q. The last sentence of the second
21 paragraph says, "Bill was clear that his whole goal
22 here is to keep Apple and Sun split. He doesn't care
23 that much about being aligned with Apple, he just
24 wants them split from other potential allies."
25 And that relates to Java, does it not,
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1 sir?
2 A. I don't have a direct recollection, but
3 if you read the sentence in front of it, that
4 paragraph seems to relate to Java runtime.
5 Q. Do you have a recollection of telling
6 your executive staff in or about August 21 that your
7 whole goal with respect to Apple related to Java
8 runtime was to keep Apple and Sun split?
9 A. No.
10 Q. Who was at this executive staff
11 meeting?
12 A. Probably members of the executive
13 staff.
14 Q. And who were they?
15 A. It's about 40 to 50 people. I doubt
16 you want to take the time for me to guess. We
17 generally get about 70 percent attendance. Looking
18 at this document, I think it's very likely that I was
19 there and John Ludwig was there, but as to the rest
20 of the executive staff, I'd just be guessing. It's
21 very rare for us to have non-executive staff members
22 at those meetings, although sometimes it happens.
23 Q. Is Mr. Ludwig somebody who you believe
24 is an honest and competent person?
25 A. In general, yes.
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1 Q. Do you have any reason to believe that
2 he would make up anything about what your statements
3 were?
4 A. No.
5 Q. Let me ask you to look at a document
6 that has been previously marked as Government
7 Exhibit 371. The portion I'm particularly interested
8 in is in the second e-mail that is in this exhibit,
9 which is on the first page. And it is an e-mail from
10 you to Paul Maritz and others dated January 22, 1998.
11 (The document referred to was marked
12 by the court reporter as Government Exhibit 371 for
13 identification and is attached hereto.)
14 Q. BY MR. BOIES: Did you send this e-mail
15 on or about January 22, 1998?
16 A. I don't remember doing so, but I have
17 no reason to doubt that I did.
18 Q. The next to last sentence says, "I
19 think we can gain a lot of share with IE on Mac if we
20 do some modest things."
21 Why were you interested in January,
22 1998, in increasing IE's share on Mac, as you
23 describe it?
24 A. I'm not sure what I was thinking in
25 particular when I wrote this mail, but I can --
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1 sitting here now, I can give you some reasons that I
2 think I would have had for saying that.
3 Q. Okay. Would you do so, please.
4 A. Well, the use of IE on Macintosh was
5 beneficial to us in terms of the APIs we had there
6 and the content HTML extensions that we had there.
7 And when you go to people who do content, being able
8 to say to them that those extensions are popular not
9 only with PC users but Mac users, it makes it easier
10 to convince the content person to take unique
11 advantage of the innovations that we had made in HTML
12 as well as some of the innovations we had made in how
13 the browser was structured.
14 Q. I want to be sure I understand your
15 answer. You mentioned APIs and you mentioned the
16 HTML extensions. Are those two different things?
17 A. Yes, sir.
18 Q. Okay. And am I correct that the
19 broader distribution of the APIs is something that
20 makes writing to those APIs more attractive to
21 independent software writers?
22 A. If users are choosing to use the
23 software that those APIs are present in, it makes it
24 easier to convince software vendors to write to those
25 APIs.
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1 Q. Let me ask the question this way. Why
2 were you interested in having Apple distribute your
3 APIs?
4 MR. HEINER: Objection.
5 THE WITNESS: Well, the key issue
6 wasn't about distribution at all. The key issue was
7 usage share by Mac users of the various browsers that
8 were available on the Macintosh.
9 Q. BY MR. BOIES: Why were you interested
10 in having the usage share of Mac users of your APIs
11 increase?
12 A. You -- that question is nonsensical.
13 Q. Okay. You were asked earlier why you
14 wanted to increase your share of IE on Mac, do you
15 recall that?
16 A. Yes.
17 Q. And am I correct that you said that
18 there were two reasons, one dealt with APIs and one
19 dealt with HTML extensions?
20 A. Yeah. I've thought of a third reason
21 since then, but that's right.
22 MR. HEINER: There was also a third
23 reason at the time. You might not remember it.
24 THE WITNESS: Now there might be three
25 or four.
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1 Q. BY MR. BOIES: Why don't you tell me
2 the one you're thinking of and we'll see if it is the
3 same one Mr. Heiner is thinking of.
4 A. Well, I talked earlier about having
5 traffic out of IE is always of value.
6 Q. So those are the three reasons that you
7 can think of now; is that correct?
8 A. Those are three reasons that are among
9 the good reasons that raising usage share of IE on
10 Macintosh was a positive thing for Microsoft.
11 Q. I'd like to know the other reasons you
12 can think of now, if there are other reasons.
13 A. That's all I can think of right now.
14 Q. Okay. Why does increasing IE share on
15 Mac help you with respect to APIs?
16 A. Because the Mac IE had APIs.
17 Q. And how does having that help
18 Microsoft?
19 A. Because those APIs are in common with
20 some Windows APIs.
21 Q. And why does that help Microsoft?
22 A. If we do things that make our APIs in
23 Windows more attractive, it helps us in increasing
24 the volume of Windows that we license.
25 Q. Are you saying that increasing IE share
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1 on Mac will help increase the number of Windows that
2 you license?
3 A. Yeah. I went through the chain of
4 logic that explains that to you. I don't know if you
5 misunderstood some part of it.
6 Q. All I'm trying to do is get your
7 answers on the record because if I begin to tell you
8 what I think about your answers, we'll be here all
9 day.
10 So am I correct that it is your
11 testimony here that increasing your share of IE on
12 Mac will increase the distribution of Windows?
13 A. I don't know what you mean by
14 distribution of Windows.
15 Q. The usage of Windows.
16 A. No. The number of copies that we
17 license.
18 Q. Will that be increased?
19 A. Through the indirect factors that I
20 explained to you, yes, there is a positive effect
21 there.
22 Q. So by increasing your share of IE on
23 Mac, you would expect to increase the number of
24 copies of Windows that you would license?
25 A. Yes, increasing our usage share over
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1 time we think will help us to increase the number of
2 copies of Windows we will license.
3 Q. Does increasing IE's share on Mac make
4 it more likely that content providers will want to
5 use IE?
6 A. I don't know what you mean by content
7 providers using IE. Content providers use servers,
8 they don't use clients.
9 Q. Do you know what content providers are?
10 A. Yes.
11 Q. Give me an example of a content
12 provider.
13 Disney?
14 A. Disney.
15 Q. Disney would be a content provider.
16 Disney is an important content provider; correct,
17 sir?
18 A. Now you're going to have to give me
19 some context.
20 Q. Without me giving you some context, you
21 can't answer the question as to whether Disney is an
22 important content provider; is that your testimony
23 under oath?
24 A. Important in what sense?
25 Q. Important in the everyday, common usage
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1 sense of what important means.
2 MR. HEINER: Mr. Boies, you're going
3 down one of those trails that you really don't need
4 to. If you go back to -- let me finish the point.
5 If you go back to the original question and answer,
6 Mr. Gates stated what part of the question he thought
7 he needed some clarification on, and it wasn't this
8 part.
9 MR. BOIES: I understand that. And I'm
10 trying to walk a balance between doing a number of
11 things, but this is somebody who won't tell me
12 whether he's going to come to trial and if he doesn't
13 come to trial, this is an evidentiary deposition and
14 if it's an evidentiary deposition, part of what I
15 need to do is make explicit on the record what I
16 think the credibility issues are. And so when I
17 think we get into what I will characterize, and
18 without meaning to engender a debate, but something
19 that might be alleged to be word games, I think it is
20 appropriate for me to make explicit what's going on
21 on the record. That's all I'm saying.
22 MR. HEINER: Okay. And I'm just saying
23 there was no question about content providers. The
24 issue was clients and servers and use of IE and can
25 easily be cleared up.
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1 MR. BOIES: Okay. I'll try to do it.
2 Q. Actually, I think probably the word
3 "content providers" was not used, but the word
4 "content" was used by the witness and I think it was
5 used in the context of answering the question.
6 THE WITNESS: If you're actually
7 interested, it's the "use IE" where you seem to be
8 confused about what content providers do. There is
9 no question about what content provider means. When
10 you say "use IE," it's people who view content who
11 use IE.
12 Q. BY MR. BOIES: Right. And in order for
13 somebody to view content through IE, that content has
14 to be put someplace to begin with; right?
15 A. Yes.
16 Q. And one of the things that Microsoft
17 has tried to do is it has tried to convince content
18 providers to put content places and in a way so that
19 it was more attractive to view that content using IE
20 than with Netscape's browser; correct, sir?
21 A. It's not the places that make it
22 attractive. It's the way they use the HTML.
23 Q. What you've tried to do, what Microsoft
24 has tried to do, is get content providers to display
25 information in a way that would make it more
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1 attractive to a user to view that content using IE
2 than using Netscape Navigator; correct, sir?
3 A. No. We tried to get them to author it
4 in a way that they exploit our HTML extensions.
5 Author.
6 Q. And is the effect of that to make it
7 more attractive for users to view the content using
8 IE than Netscape Navigator?
9 A. It totally depends on what they do --
10 what Netscape Navigator does with HTML extensions and
11 what that content provider does with those HTML
12 extensions.
13 Q. Let me ask what I think is a simple
14 question. Has Microsoft made an effort to get
15 content providers to agree to display information in
16 a way that makes that information more attractive
17 when viewed by the then existing Internet Explorer
18 than if viewed by the then existing Netscape browser?
19 A. Our efforts have been focused in
20 getting them to author so that it looks good in
21 Internet Explorer. These people are authors. They
22 don't do display, they do authoring.
23 Q. Let me try to use your words and maybe
24 that will move it along.
25 Have you tried -- has Microsoft tried
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1 to get content providers to agree to, in your words,
2 author information and data in a way so that that
3 information and data is more attractive to users when
4 viewed through the then current version of Internet
5 Explorer than when viewed through the then current
6 version of Netscape's browser?
7 A. Our attempts to convince people to
8 author using our extensions is not relative to
9 Netscape. It's just a question of can we convince
10 them to use our extensions. And yes, we have
11 endeavored to convince them to use our extensions,
12 but that doesn't say anything about what they're
13 doing or how that stuff looks in Netscape.
14 Q. Are you saying that your effort to
15 convince content providers to use your extensions was
16 unrelated to what the effect would be on Netscape?
17 A. The effect on Netscape would be
18 indirect. Our intent in doing that was to increase
19 the popularity of our products.
20 Q. Was part of your objective also to
21 decrease the popularity of Netscape products?
22 A. Our intent was to increase the
23 popularity of our products.
24 Q. I'm asking a different question. The
25 answer may be simply no, but I'd like to have an
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1 answer to my question, which is that in addition to
2 trying, as you say you were trying to, to increase
3 the popularity of your products, were you also trying
4 to decrease the popularity of Netscape products?
5 A. All of our effort was aimed at making
6 our product more popular. There may have been an
7 indirect effort in terms of their people choosing our
8 product over other people's products, but the focus
9 is on making our product more attractive.
10 Q. Did you enter into agreements with
11 content providers that limited the ability of those
12 content providers to make their content more
13 attractive when viewed through Netscape's then
14 current browser?
15 A. I'm not familiar with agreements that
16 we had with content providers.
17 Q. You're not familiar with them at all;
18 is that what you're saying?
19 A. I know that we had some, so I'm
20 familiar with their existence. I've never read one,
21 I've never seen one, I've never negotiated one.
22 Q. Have you ever discussed with anyone the
23 substance of what is in them?
24 A. What I know about them is that they --
25 they're related to the efforts to convince people to
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1 take advantage of extensions we've done that make
2 those extensions worthwhile to end users.
3 Q. My question now is whether you've ever
4 discussed the substance of what's in those agreements
5 with anyone. And if you have --
6 A. To the degree I just described them,
7 yes. Beyond that, no.
8 Q. With whom did you have those
9 discussions?
10 A. Oh, it would have been in meetings with
11 various people. You know, Brad Chase, Paul Maritz.
12 Brad Silverberg in a certain period of time.
13 Q. And did they ever tell you that these
14 agreements with content providers limited what the
15 content providers could do with Netscape?
16 A. I don't think so.
17 Q. Do you know, as you sit here now,
18 whether any of the agreements that you entered into,
19 Microsoft entered into with content providers over
20 the last three years limited what those content
21 providers could do with Netscape?
22 MR. HEINER: This question now is,
23 perhaps intentionally, quite a bit broader than the
24 original question about extensions and so forth? Or
25 maybe it's not intentional.
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1 MR. BOIES: It is a different question.
2 And if the witness doesn't understand it, I'll
3 rephrase it.
4 THE WITNESS: I know that when I was
5 going to testify in Washington, D.C. in the Senate,
6 that Netscape or someone was raising these content
7 provider agreements in an effort to create some
8 controversy around them. And so I was given like a
9 paragraph or two summary. And there were about 40
10 issues in general there, but one of the issues was
11 related to those agreements. And so there may have
12 been something in those paragraphs about the
13 agreements beyond what I knew about them earlier.
14 Q. BY MR. BOIES: But you don't recall the
15 substance of that now; is that what you're saying?
16 A. Well, I can tell you there was
17 something about in a period of time a certain class
18 who is on our channel bar, they could appear on
19 competitive channel bars, but if they -- they could
20 only pay us. There was something like that.
21 Q. That's an interesting one for you to
22 focus on. Can you think of any reason why you would
23 want content providers to agree that they would not
24 pay Netscape any money?
25 A. I know that we had hopes that the
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1 channel bar would get some usage and we wanted to
2 work with some content providers to show off the
3 channel bar. And I can't give you the reasoning
4 behind any part of the ICP agreement because I wasn't
5 involved in those.
6 Q. But what I'm asking you now is whether
7 you, as you sit here now, can think of any legitimate
8 reason why Microsoft would be getting content
9 providers to agree not to pay Netscape? I'm not
10 talking about getting them to try to use your channel
11 bar. I'm talking about getting them to agree not to
12 pay Netscape.
13 A. You'd have to ask somebody else why
14 they put that in the agreement, unless you're asking
15 me to speculate wildly.
16 Q. Well, I don't know whether it would be
17 wild speculation or not, but I'm asking you whether
18 you, as you sit here now, as the chief executive of
19 Microsoft, can think of any legitimate reason for
20 Microsoft getting content providers to agree not to
21 pay Netscape?
22 MR. HEINER: Object to the question as
23 lacking foundation.
24 THE WITNESS: I'm not aware of any
25 broad prohibition against paying Netscape for
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1 anything. I think there was something about relative
2 to the channel bar, we wanted some of the premier
3 partners, which is a very small number, to talk about
4 their work with us. And it would have been
5 embarrassing if all those same people were in the
6 same relationship with Netscape in that time period.
7 Q. In your answer in which you said that
8 you thought you recalled some of the things that you
9 were told in preparation for your hearing testimony,
10 you were the one, were you not, just a few minutes
11 ago who said that you recalled that there was some
12 provision that even if the content provider was on
13 another channel bar, they couldn't pay for it? Do
14 you recall saying that just a few minutes ago?
15 A. Uh-huh.
16 Q. You've got to say yes so the
17 reporter --
18 A. Yes.
19 Q. Now, that's what I'm asking about.
20 What I'm asking is whether you can think of any
21 legitimate reason why Microsoft would get a content
22 provider to agree not to pay Netscape?
23 A. I can guess about that if you want.
24 Q. What I'm asking is not whether you can
25 guess why you did it because we could all guess maybe
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1 why you did it. What I'm asking is whether you can
2 think of any legitimate reason that would justify
3 doing that?
4 A. Sure.
5 Q. What?
6 A. Well, someone might have said, gee, it
7 would be embarrassing if all these same people
8 appeared in Netscape's equivalent in that time
9 period, let's have them agree not to appear at all.
10 And then someone else might have said no, let's not
11 be that restrictive, let's just make it less likely
12 they will appear by saying that they won't pay
13 Netscape to appear.
14 Q. But if you're going to let them appear,
15 why would you try to stop them from paying to appear?
16 A. It lowers the probability that they
17 will appear.
18 Q. And why does it do that, sir?
19 A. Because there's lots and lots of
20 content providers. And so in the channel bar, these
21 gold or premier or platinum -- I forget the
22 terminology -- slots, there's only visually, at least
23 in the way we did it, room for about five or six of
24 those. And so if you have a contract that says that
25 they won't take money from Netscpae to appear on
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1 their channel bar, given the broad universe of
2 content providers that are out there, it's very
3 likely that Netscape will choose to pick people who
4 do pay them to be in their channel bar and therefore
5 you've lowered the probability that all the people
6 who appear in yours also appear in Netscape's.
7 Q. So that precluding people from paying
8 was an indirect way of trying to make sure that they
9 didn't appear on Netscape's channel bar; is that
10 right?
11 A. No. Now you've changed things. I've
12 told you I don't know why the provision was put in
13 there. You asked me if I could think of any set of
14 reasoning behind it, and which I did, and then you
15 changed and asked me a question about the history,
16 which again, I can't talk to you about the history.
17 Q. And I don't mean to be asking just
18 about the history. What I mean to be asking is
19 whether you, as the chief executive officer at
20 Microsoft -- and you testified yesterday about some
21 practices that you thought were consistent and some
22 practices that you thought were inconsistent with
23 company policy. And is it consistent with company
24 policy, let me approach it this way, to get companies
25 like content providers to agree not to pay
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1 competitors, is that consistent with company policy
2 if that was done?
3 MR. HEINER: Objection.
4 THE WITNESS: Well, our company policy
5 is that when we're doing agreements, we rely on the
6 expertise of our law and corporate affairs department
7 to look at those and make sure that they're
8 appropriate. That's one of the things that's done in
9 agreements like that.
10 Q. BY MR. BOIES: Well, other than
11 whatever your lawyers tell you that you can do, which
12 I don't want to ask about because I think they will
13 probably object that it's privileged, do you have a
14 company policy that addresses the issue of whether it
15 is appropriate for Microsoft people to enter into
16 agreements that limit companies from doing business
17 with Microsoft's competitors?
18 A. There is no general policy that covers
19 that area. As I said, the very competent staff we
20 have is involved in reviewing agreements we reach.
21 Q. Did you ever have any conversations
22 with anyone about whether or not they could deal with
23 a competitor of Microsoft?
24 A. That's open ended enough that I'm not
25 sure what you mean at all.
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1 Q. I mean to keep it open ended as an
2 initial question and then if you say no, I don't have
3 to go through it, but if you say yes, then I go
4 through who you met with and what you said.
5 MR. HEINER: Let's have the open-ended
6 question read back, if we could.
7 (The record was read as follows:
8 "Q. Did you ever have any conversations with
9 anyone about whether or not they could deal
10 with a competitor of Microsoft?")
11 THE WITNESS: I'd say the answer is
12 probably yes because, for example --
13 Q. BY MR. BOIES: If the answer is yes,
14 then --
15 A. No, I want to make -- I think I should
16 give an example so you understand how I've
17 interpreted your question.
18 Q. Could you give me a specific example?
19 A. Yes. IBM is a competitor of ours and
20 people have said to me should we fly out and meet
21 with IBM on this topic. And I've said in some cases
22 yes, we should and in some cases no, we shouldn't.
23 So that's a case where I was giving people advice on
24 whether they should deal with a competitor of
25 Microsoft.
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1 Q. Were these people within Microsoft?
2 A. People -- yes.
3 Q. Now, have you ever had any personal
4 conversations with anyone other than a Microsoft
5 employee as to whether that person's company could or
6 should deal with a competitor of Microsoft?
7 A. Well, in terms of should, I might have
8 said to somebody that --
9 Q. No, no. I'm not asking what you might
10 have said. What I'm asking is what you remember
11 doing. I'm trying to move this along. I'm trying to
12 stay as concrete as I can and I'm not asking you to
13 speculate about what you might have done.
14 A. Okay. I know --
15 Q. I'm asking you what you remember doing.
16 A. I know concrete cases where I've told
17 customers that I think picking our product as opposed
18 to a competitor's product is in their best interests
19 and so they should pick our product. And in that
20 sense, yes.
21 Q. Have you told people that if they pick
22 your product, they can't use a competitor's product?
23 A. If there's a technical issue about how
24 things won't work together, possibly. But otherwise,
25 no.
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1 Q. Do you know a Mr. Poole who works at
2 Intuit?
3 A. No.
4 Q. You do not?
5 A. No. I think you're confused.
6 Q. You may be right, but all I need to do
7 is get your testimony down and then people can judge
8 for themselves.
9 So it is your testimony that you do not
10 know anyone who works at Intuit who is named
11 Mr. Poole. Do you know somebody at Microsoft who
12 deals with Intuit who is named Mr. Poole?
13 A. Yes. It's quite distinct.
14 Q. Yes. The distinction actually is at
15 the heart of what I'm going at, sir.
16 What is Mr. Poole's first name?
17 A. Will. That's at least what he goes by.
18 Q. And what has Mr. -- what is Mr. Will
19 Poole's title?
20 A. I have no idea.
21 Q. You have dealt directly and personally
22 with Mr. Poole, have you not, sir?
23 A. Not until very recently.
24 Q. When was the first time that you dealt
25 directly and personally with Mr. Poole?
374
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 A. Well, if you mean was he ever on an
2 e-mail that I went back and forth on, that probably
3 goes back -- that could be any time in the last few
4 years. In terms of actually being in a meeting that
5 Will was in, I think that's quite recent.
6 Q. When?
7 A. Which?
8 Q. Both.
9 A. I said in terms of e-mail, that would
10 be the last couple years. How can I be more concrete
11 than that? I answered the question.
12 Q. Can you be more concrete than the last
13 couple years?
14 A. No.
15 Q. Okay. Now, when with respect to the
16 meeting?
17 A. I don't think I was in a meeting that
18 he was in until maybe two or three months ago.
19 Q. Did you ever have a discussion with
20 Mr. Poole, either orally or through an e-mail, in
21 which you told Mr. Poole what the conditions were
22 pursuant to which Microsoft would give Intuit access
23 to a position on the Active Desktop?
24 A. There may have been mail on that
25 general topic, but I don't remember any specific
375
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 mail.
2 Q. Did you have any discussions with
3 Mr. Poole, apart from e-mail?
4 A. No.
5 Q. Did you tell Mr. Poole in words or in
6 substance that Intuit could get access to a position
7 on the Active Desktop only if it would agree not to
8 deal with Netscape?
9 A. There may have been some discussion
10 about whose browser technology Intuit chooses to
11 integrate its products with. There certainly wasn't
12 anything broadly about dealing with Netscape.
13 Q. Let me try to be as precise as I can.
14 Did you tell Mr. Poole in words or in substance that
15 if Intuit wanted to have access to a position on the
16 Active Desktop, Intuit would have to agree to use
17 Microsoft's browser technology and not use Netscape's
18 browser technology?
19 A. I don't remember that specifically, but
20 I do know that we were, in various time periods,
21 endeavoring to get Intuit to choose the component
22 ties to IE technology as the way that Quicken -- the
23 default way that Quicken would bring up a browser.
24 In fact, they've always supported both browsers at
25 all times.
376
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. My question to you is whether you told
2 Mr. Poole either orally or through e-mail that in
3 order for Intuit to get access to a position on the
4 Active Desktop, Intuit would have to agree not to use
5 the Netscape browser technology? Did you tell
6 Mr. Poole that orally or through e-mail?
7 A. I know we were talking with Intuit
8 about using IE as the default browser because of our
9 technology. So in that sense of being a default, we
10 were trying to get them to favor IE. But I don't
11 remember any specific thing beyond that.
12 Q. So is it your testimony that you do not
13 remember telling Mr. Poole in words or in substance
14 that if Intuit was to have access to a position on
15 the Active Desktop, Intuit would have to agree not to
16 use the Netscape browser technology?
17 A. Intuit has supported the Netscape
18 browser technology at all times and I never thought
19 there was any chance of avoiding them supporting the
20 Netscape browser technology. I did think there was a
21 chance that we would become the default and I was
22 hoping we could convince them that it made sense for
23 them to make us the default.
24 Q. Default browser?
25 A. That's right.
377
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. I understand that's what you said and I
2 do want to explore that, but I want to first be clear
3 that it is your testimony that you never told -- or
4 at least you don't recall ever telling Mr. Poole in
5 words or in substance that in order to get access to
6 a position on the Active Desktop, Intuit would have
7 to agree not to deal with Netscape or not to use the
8 Netscape browser technology?
9 A. I don't remember using those exact
10 words.
11 Q. How about substance?
12 A. In terms of substance, my desire to get
13 us to be the default did imply a favorable position
14 for us relative to other browsers.
15 Q. Is it fair to say that your position
16 with respect to wanting to become the default browser
17 for Intuit meant that the Microsoft browser would
18 have a more favorable position, but it would not
19 preclude Intuit from dealing with Netscape; is that
20 correct?
21 A. That's right.
22 Q. Now, I want to follow up on that issue,
23 but before I do, I want to be absolutely certain that
24 I have your testimony now clear. And that is,
25 leaving aside the issue of becoming the default
378
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 browser, did you ever tell Mr. Poole in words or in
2 substance that in order for Intuit to have access to
3 a position on the Active Desktop, Intuit would have
4 to agree not to deal with Netscape or not to use the
5 Netscape browser technology? Did you ever
6 communicate that to Mr. Poole in words or in
7 substance?
8 A. You can't leave out the idea of the
9 default browser. It's nonsensical to say did you do
10 that but leaving out the notion of the default
11 browser. The substance of us being the default
12 browser is that that's a favorable position for our
13 browser. So what you've just asked me is
14 nonsensical.
15 Q. Does making Internet Explorer the
16 default browser preclude Intuit from dealing with
17 Netscape?
18 A. In a specific way, yes.
19 Q. In what way?
20 A. Any deal that relates to them being the
21 default browser.
22 Q. Other than a deal that involves them
23 becoming the default browser, does it preclude Intuit
24 from dealing with Netscape?
25 A. Not necessarily.
379
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. So that Intuit could make Internet
2 Explorer its default browser but still deal with
3 Netscape with respect to Netscape's browser, correct?
4 A. Intuit at all times has supported the
5 Netscape browser.
6 Q. Now, I think it has to be clear from
7 what you just said that it is your view that becoming
8 the default browser does not preclude Intuit from
9 dealing with Netscape completely in terms of
10 browsers; is that fair?
11 A. Well, it was the issue that would have
12 been of the most interest to us.
13 Q. I'm not asking what the interest was
14 that you had or what the issue was that was of most
15 interest to you. What I'm asking is whether, aside
16 from the issue of the default browser, have you ever
17 told Mr. Poole in words or in substance that in order
18 for Intuit to get access to a position on the Active
19 Desktop, Intuit would have to agree not to deal with
20 Netscape or not to use the Netscape browser
21 technology at all?
22 A. That question doesn't make sense to me.
23 If you say that somebody is not the default, you're
24 certainly affecting how they deal with you on the
25 browser.
380
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Q. Would you explain what you mean by
2 that?
3 A. We wanted to convince Intuit to make us
4 the default browser.
5 Q. And making you the default browser,
6 does that preclude them from dealing with Netscape at
7 all in terms of browsers?
8 A. Not in every respect, no.
9 Q. Okay, not in every respect.
10 Did you ever tell Mr. Poole in words or
11 in substance that if Intuit was going to obtain
12 access to a position on the Active Desktop, Intuit
13 would have to stop supporting the Netscape browser?
14 A. Well, supporting can mean a lot of
15 different things. I know that --
16 Q. I mean what you mean when you said it.
17 A. I never expected at any time that they
18 would not support the Netscape browser in terms of
19 running with it, working with it, supporting it and
20 all those things. In terms of did I use that
21 specific word, no, I don't -- I don't have a
22 recollection. But, you know, support can mean quite
23 a few things.
24 Q. What I'm not doing right now is asking
25 what you meant by support. What I'm asking you is
381
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 whether you told Mr. Poole that. Do you understand
2 the distinction?
3 A. Did I use those words?
4 Q. That you told Mr. Poole --
5 A. See, if you're going to ask me did I
6 use the exact words, you can ask me that question.
7 Or if you're going to ask me if I said something like
8 that, that's okay, but then I have to actually
9 understand what the words -- what you mean by the
10 words.
11 Q. Let's take it one step at a time.
12 Did you tell Mr. Poole that if Intuit
13 was to have access to a position on the Active
14 Desktop, Intuit would have to stop "supporting" or
15 could no longer "support" the Netscape browser?
16 A. What does it mean when you keep going
17 in and out of quotes like that?
18 Q. It means you used the word "supporting"
19 or you used the word "support."
20 MR. HEINER: In that case, you should
21 put the document in front of the witness.
22 MR. BOIES: I'm just asking whether he
23 ever communicated that orally or in writing or by
24 e-mail to Mr. Poole.
25 MR. HEINER: I think you twice
382
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 testified in the scope of your questions about things
2 he said. And so if you have a document, at some
3 point, just put it --
4 MR. BOIES: I'm just asking him whether
5 he said it.
6 THE WITNESS: Whether I said what?
7 Q. BY MR. BOIES: Well, whether you told
8 Mr. Poole that if Intuit was to have a position on
9 the Active Desktop, that Intuit would have to agree
10 to stop supporting or could no longer support, that
11 is, you used the word "support," the Netscape
12 browser? Did you do that, sir, in e-mail
13 communications or orally or any other form of
14 communications to Mr. Poole?
15 A. I don't remember using those words, if
16 that's the question.
17 Q. Do you remember whether or not you used
18 those words?
19 A. No.
20 Q. Let me turn now to the substance of
21 what you told Mr. Poole. And what I'd like you to
22 describe for me in your own words is what did you
23 tell Mr. Poole, either orally or by any other form of
24 communication, Intuit would have to agree to in order
25 to get access to a position on the Active Desktop?
383
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HEINER: Objection. I may be
2 mistaken, but I think the question lacks foundation.
3 MR. BOIES: I will rephrase the
4 question.
5 Q. What, if anything, did you tell
6 Mr. Poole --
7 A. I'm not sure if I told Mr. Poole or
8 Mr. Chase or Todd Nielson or who, but I'm sure I
9 communicated that the kind of support Intuit had been
10 giving where Netscape was the default browser, that I
11 didn't see that as consistent with agreeing with
12 them -- for them to be featured on the active channel
13 bar.
14 Q. I think that goes to what you were
15 saying before, which is that you wanted Microsoft's
16 browser to become the default browser?
17 A. That's right.
18 Q. Now, what I'm trying to do is ask
19 whether you went beyond that in talking to Mr. Poole.
20 Did you say to Mr. Poole that if Intuit is going to
21 get access to a position on the Active Desktop,
22 Intuit had to do something more than simply make IE
23 the default browser?
24 A. That was my goal there, which of course
25 would imply a change in how they'd been supporting
384
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 Netscape as the default browser.
2 Q. I understand that you said you wanted
3 IE to be the default browser and that inevitably
4 means that Netscape can't be the default browser
5 because you can only have one default browser; right?
6 A. Right.
7 Q. What I'm now asking is did you go
8 beyond that and say to Mr. Poole that if Intuit was
9 going to get access to a position on the Active
10 Desktop, Intuit would have to do something more than
11 simply make IE the default browser?
12 A. I don't think so.
13 Q. Did you ever say that to Mr. Chase or
14 to anyone else?
15 A. I don't think so.
16 Q. Or communicate it in e-mail or some
17 other communication?
18 A. I included that. So no, I don't think
19 so.
20 Q. I thought you might have included it,
21 but I wasn't sure, so I wanted to be clear.
22 MR. HEINER: If we've come to a logical
23 stopping point within this small subset of this
24 point, let's break for lunch.
25 MR. BOIES: Okay.
385
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 MR. HEINER: Okay.
2 VIDEOTAPE OPERATOR: The time is 11:54.
3 We're going off the record.
4 (Lunch recess.)
5 * * *
6
7
8
9 I hereby declare, under penalty of
10 perjury, that the foregoing answers are true
11 and correct to the best of my knowledge and
12 belief.
13 EXECUTED AT_____________, WASHINGTON,
14 this_________day of________________, 1998.
15
16 ________________________________
17 BILL GATES
18
19
20
21
22
23
24
25
386
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900





1 STATE OF CALIFORNIA )
) ss.
2 COUNTY OF LOS ANGELES )
3
4 I, Kathleen E. Barney, CSR 5698, a
5 Certified Shorthand Reporter in and for the State of
6 California, do hereby certify:
7 That, prior to being examined, the
8 witness named in the foregoing deposition was by me
9 duly sworn to testify the truth, the whole truth, and
10 nothing but the truth;
11 That said deposition was taken down by
12 me in shorthand at the time and place named therein
13 and was thereafter reduced to typewriting under my
14 supervision; that this transcript is a true record of
15 the testimony given by the witness and contains a
16 full, true and correct record of the proceedings
17 which took place at the time and place set forth in
18 the caption hereto as shown by my original
19 stenographic notes.
20 I further certify that I have no
21 interest in the event of the action.
22 EXECUTED this_______day of____________,
23 1998.
24 ______________________________
25 Kathleen E. Barney, CSR #5698
387
BARNEY, UNGERMANN & ASSOCIATES 888-326-5900




Released Pursuant to 15 U.S.C. ۤ30





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