Microsoft Corp. repeatedly has pointed to tiny
Be Inc. when the software giant, during its antitrust trial, has
needed examples of the competition it faces in selling computer
Denying the government's claim that it is a monopoly, Microsoft
contends it cannot rest easy because of the possible success of
Be's computer software, which even Microsoft praised as "designed
with special capabilities" for software programs "certain to be
major growth areas in the years ahead."
So it was particularly dramatic Thursday when the government
disclosed that the world's largest computer maker, Compaq Computer
Corp., which is testifying in support of Microsoft, recently passed
secret information to Microsoft that it obtained from Be under a
Justice Department lawyer David Boies made the accusation as he
tried to discredit Compaq's testimony.
Compaq's witness, John T. Rose, a senior vice president, said he
was unaware that his company had passed along to Microsoft any
But Jean-Louis Gassee, the chairman and chief executive officer
for Be, based in Menlo Park, Calif., said in a telephone interview
later with The Associated Press that Compaq had called him "a
little embarrassed" about three months ago confessing what it
described as an inadvertent disclosure to Microsoft.
"Microsoft is such a threat to the livelihood of PC (makers),
there is a climate of fear," Gassee said. "They will do things
almost instinctively to propitiate Microsoft."
Bois charged that "Microsoft has such power in the industry
that Compaq feels it is in Compaq's interest to share the details
of confidential negotiations."
A lawyer for Compaq, William Coston, called the accusation a
"cheap trial stunt."
U.S. District Judge Thomas Penfield Jackson ended the matter
after Rose denied any knowledge of a disclosure. But Jackson seemed
content with assurances from Boies when he asked, "You have a
good-faith basis for that?"
Another Compaq lawyer, Tom Siekman, said outside the courtroom
that the company "takes its obligations very, very seriously."
"It's not appropriate to make an allegation of this kind in
open court," said Siekman, who added that Compaq was
The government alleges that Microsoft violated antitrust laws by
using its monopoly power to dissuade Compaq and others from doing
business with its software rivals. Microsoft denies it possesses
Boies' allegation was not the only problem facing Compaq on
The judge openly questioned the credibility of a key piece of
its evidence, saying a disparity over dates in a particular
contract with Microsoft "makes no sense at all if this was a
Jackson noted that the agreement in question was dated August
1995 but was not signed or executed until June 1996.
Compaq is widely believed to enjoy among the lowest prices for
its Windows operating system that Microsoft charges any computer
maker, but the actual costs are among the industry's most closely
The government showed e-mail Thursday disclosing that Compaq and
Microsoft actually signed two new price contracts last spring, less
than two months before the government filed its antitrust case.
One contract, with more favorable terms toward Compaq,
immediately replaced the other. Boies did not suggest a reason for
dual contracts, but noted: "If you're not going to use the false
(contract) then there's no reason to have it."
The e-mail said Compaq wanted dual contracts "given Microsoft's
concern that our agreement be 'defendable' to other (computer
makers) and the Department of Justice."
Rose asserted that Compaq was trying to hide details of the
price it negotiated from its own employees.
The government has charged that Microsoft's ability to use
Windows prices to discriminate among computer makers illustrates
its monopoly power.
A Microsoft spokesman, Jim Cullinan, called it "outrageous" to
suggest that the relatively low price for Windows given to Compaq
was at all related to the company's offer to testify on its behalf
during the antitrust trial.