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January 26, 2007 2:27 PM PST
Did Microsoft want to 'whack' Dell over its Linux dealings?
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But Redmond representatives said Friday that the 2002 exchange, made public this week as part of an antitrust suit unfolding in Iowa state court, only tells part of the story. They said it omits evidence that Microsoft executives were simultaneously seeking legal advice on how to ensure they were responding to such competitive threats without shirking their antitrust responsibilities.
The e-mail thread (PDF), which occurred over three days in November 2002, showed up in the latest batch of court exhibits posted to a Web site maintained by attorneys representing a class of Iowa consumers embroiled in an ongoing antitrust suit against the Windows maker. It was reported earlier by Bloomberg News.
In the first e-mail, Bill Veghte, now a company vice president, described a panel discussion he had recently attended in which a Dell executive boasted that the company was the top distributor of the open-source operating system among equipment manufacturers and was "committed to seeing that position grow."
Veghte and others went on to express concern about the competitive threat potentially posed by Linux and Red Hat.
"We should whack them, we should make sure they understand our value," wrote Paul Flessner, a senior vice president in Microsoft's server applications unit.
U.S. District Judge Colleen Kollar-Kotelly in Washington, D.C., had approved most of the federal government's antitrust decree with Microsoft about a week before the exchange began.
Microsoft spokesman Jack Evans on Friday downplayed the messages.
"While this may sound provocative, what counts at the end of the day is what actually happened," he said. "Looking at subsequent portions of this e-mail thread, which the plaintiffs chose to exclude from their exhibits, it's evident that we didn't take any retaliatory action against Dell. In fact, we very clearly increased our investment with Dell."
Participants in the same e-mail thread also sought confidential legal advice about how to proceed in such situations where competitive threats existed, given the limits imposed by Microsoft's antitrust agreements, Evans added.
Iowa antitrust suit uniqueThe Iowa suit, filed in February 2000 on behalf of a businessman in the state, is one of the last remaining state antitrust proceedings against Microsoft. The company has already reached settlements in 17 states and had class-action suits dismissed or decertified in 18 others.
The Iowa case is unique because it allows consumers, as opposed to just equipment manufacturers, to sue Microsoft directly. The class, which is made up of the so-called "indirect" purchasers of Microsoft's operating-system software and of its applications software including Word and Excel, seeks $330 million in damages. The trial, which began in December, is expected to last at least six months.
Microsoft has reportedly turned over 25 million pages of documents to Iowa prosecutors, and it has already had to do some explaining to the public about what they contain.
In December, the blogosphere took note of a 2004 memo (PDF) in which retiring Windows chief Jim Allchin professed, "I would buy a Mac today if I was not working at Microsoft." (He later said he was being "purposefully dramatic.")
The plaintiffs have already uploaded thousands of pages for public consumption. A spokesman for the plaintiffs said more are likely to be on the way, as the court admits them as evidence.
See more CNET content tagged:
antitrust, plaintiff, court, Redmond, Linux
47 comments
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Sales were lukewarm and then HP cut a deal with Wal-mart for the shelf space and after less than a year, they were pulled.
server business.
No major retailers are currently offering Linux PCs because there
isn't a single Linux distro with the breadth of hardware and
multimedia support that Windows has. Why would they offer a
product that no one wants?
Microsoft isn't innocent, that's for sure, but to blame Microsoft
for Linux distros failing to be competitive consumer desktop
platforms is just ignorant.
off. Windows should be taken off the market and all copies
destroyed. It's the only way to fix the beast.
<a class="jive-link-external" href="http://www.ocf.berkeley.edu/~wrader/slang/w.html" target="_newWindow">http://www.ocf.berkeley.edu/~wrader/slang/w.html</a>
I find your comment outdated and just hateful. I have a Dell XPS 410 that is amazing computer. I have no complaints. It's an excellent computer. Granted, they went through a tough patch, but don't just be "hating".
NateMan_99
Microsoft has lost quite a few lawsuits here in the U.S., and how has this affected the way they do business? The answer is, it hasn't forced them to change there ways much at all. They have great lobbyists and lawyers, and are able to successfully avoid having to compete by buying their way out of legal issues. It's a disgrace to this land of "laws".
ship Dells with OS X if it was available for OEM license (whether it
ever will be of course is an entirely other question).
I can't imagine the fury that would generate in Redmond!
Something approaching that huge eye on the top of Mt Doom in
Lord of the Rings might come close...
Anybody?
/P
Also, the metric you stated is changing - servers now come with RHEL or SLED pre-installed. Finally, home users w/ Ubuntu or similar easy-to-use distros don't really have to do anything on the tinker-level anymore.
/P
It actually costs more to build your own PC than to buy a pre-fab one using the same hardware specs. In the reason I don't just buy a Windows based one and convert it is many have some hardware (especially modems) that are Windows only not to mention I don't want to have to pay for an OS I'm not going to use.