Apple tells of Microsoft threats

WASHINGTON--Microsoft attempted to "sabotage" a popular multimedia program by causing misleading error messages to appear when it ran on Windows-based machines, a senior executive from Apple Computer has charged.

The misleading messages were displayed when Windows users attempted to use certain media formats supported by Apple's QuickTime, a program that competes with Microsoft's MediaPlayer. Apple senior vice president of software engineering Avadis Tevanian made his remarks in 45 pages of written testimony released today. On Monday, the Apple executive is set to testify against Microsoft in the landmark antitrust trial under way here.

The error messages were just one of many steps Microsoft took when it used its software dominance to take control of the emerging market for multimedia software, Tevanian alleged. Microsoft strongly denied the accusation.

Tevanian also claimed that Microsoft proposed that it split the multimedia software market with Apple, a charge that echoes claims made by Netscape Communications' chief executive earlier in the trial. In a series of meetings in 1997, Microsoft allegedly pressured Apple to withdraw products that computer users need for playing multimedia files. In return, Microsoft allegedly would allow Apple to market tools that software developers use to create multimedia content.

The disagreement was so great that it prompted Apple's interim chief executive Steve Jobs to email Microsoft CEO Bill Gates on Febuary 3, 1998, "expressing Apple's concerns about the threatening behavior of Microsoft's employees." Jobs continued to play a direct role in trying to resolve the dispute.

"Microsoft made it clear that, if Apple refused to relinquish the playback market, Microsoft would use its monopoly power to drive Apple out of the entire multimedia market," Tevanian claimed.

Elsewhere, his written testimony stated: "Microsoft does not hesitate to use its operating system monopoly power and application program dominance to try to eliminate competition, acquire control of new markets, and block innovation that could challenge its position. As long as Microsoft can dominate new markets by leveraging its unchallenged control of both the Windows operating system and essential application programs, competition--which has been the engine of innovation and growth in this industry--will be curtailed."

Tevanian also charged that Microsoft in mid-1997 made a series of threats aimed at Apple if it did not agree to ship its Macintosh computers with Microsoft's Internet Explorer as their default browser. Chief among them was the warning that Microsoft would discontinue its popular Office program for the Macintosh, which Apple viewed at the time as crucial to its survival. Market share for the Macintosh was 3.5 percent, and Apple worried that use would drop even lower if Office was no longer available.

"Making Microsoft's Internet Explorer the default browser on the Mac OS did not confer any substantive technical benefit on users, but it would help Internet Explorer to become the most commonly used browser among Mac customers," Tevanian wrote. "Many individuals within Apple were dissatisfied with Apple having agreed to Microsoft's terms regarding Internet Explorer."

Tevanian's testimony also detailed pressure Microsoft allegedly put on third parties to stay away from QuickTime.

Although Compaq Computer had "expressed excitement about QuickTime," the PC maker backed away from the technology, allegedly because of pressure from Microsoft, Tevanian testified. During one meeting between the two companies to discuss licensing QuickTime, Steven Decker, the procurement director for Compaq's Presario division, allegedly warned that the PC maker's marketing executives were leery of a deal with Apple. "They're very afraid of doing anything to upset Microsoft," Decker allegedly told an Apple manager.

Tevanian also contended that Microsoft strong-armed other companies, including Avid Technology and Truevision.

Tevanian also confirmed that Apple in 1996 approached Microsoft and claimed that certain technologies used in Windows and Internet Explorer infringed Apple patents. The two companies also sparred over a deal between Apple and Netscape Communications in which Navigator was to be the default browser on the Macintosh. "Microsoft ultimately succeeded in resolving both disputes" with its threat to discontinue Office, Tevanian wrote.

The Apple executive, who did not join Apple until February of 1997, also contended that Microsoft deliberately made proprietary formats of multimedia content that were incompatible with QuickTime.

In a detailed statement, Microsoft refuted Tevanian's testimony, accusing him of misrepresenting the facts.

"While Dr. Tevanian alleges that Microsoft has somehow intentionally disabled his company's product, the facts tell a different story," the statement said. "The facts show that Apple's engineers did not properly author the QuickTime set-up program for Windows."

The statement also disputed Tevanian's other charges. "The allegation that Microsoft threatened to withhold Macintosh Office 98 in order to force Apple to make Internet Explorer its default browser is another example of how the government deliberately twists facts to support its distorted allegation. Rather than walk away from millions of Microsoft customers who use the Mac, Microsoft worked with Apple to resolve a number of issues between the two companies."

Tevanian will be cross-examined by Microsoft attorneys when he takes the stand on Monday.