March 26, 1998
Mr. Bill Gates
Chairman and CEO
One Microsoft Way
Redmond, WA 98052-6399
Dear Mr. Gates:
Thank you for appearing at the Committee's March 3 hearing. Your participation provided a critical perspective on the important issues regarding competition in the software industry. We appreciate that Microsoft's input is essential to ensure that our understanding of these issues is balanced and well-informed, and look forward to Microsoft's continued cooperation.
As the Committee follows up on questions raised at the March 3 hearing, it would be helpful to hear not just from Microsoft and its competitors, but also from the respective companies' licensees and other contractual partners. We therefore renew and further clarify the request already made by Senator Hatch that Microsoft provide the Committee with a letter (hereinafter "Clarifying Letter") that would free Microsoft's licensees and other contractual partners to provide information to the Committee without first notifying, or obtaining the permission of Microsoft. The same request is being made of Netscape and Sun Microsystems.
Specifically, we ask that you provide the Committee with a letter containing essentially the same terms as the September 8, 1997, letter from Microsoft Senior Attorney David Heiner to Justice Department attorney Kenneth Gaul (attached). This letter states, in relevant part, the following:
Microsoft does not interpret its license agreements or non-disclosure agreements as requiring its licensees or NDA signatories to inform the company of any discussions or dealings with the Department of Justice. Microsoft further believes that receipt by a licensee or an NDA signatory of an executed copy of a letter in the form attached hereto will serve to satisfy the confidentiality obligation of that person or entity with regard to protection of any confidential Microsoft documents or information which the person or entity may produce to the Department.Procedural rules governing the Justice Department's handling of commercially sensitive information do not, of course, apply to the Judiciary Committee. We are, however, sensitive to the interests of Microsoft, and its contractual partners, in protecting the confidentiality of such information. We therefore would like to minimize the extent to which such sensitive information is provided to the Committee and, at the same time, provide adequate protection for any sensitive information the Committee might receive. Toward this end, we offer the following assurances:
1) Scope of information provided to the Committee: The Committee is, at this point, interested in examining a limited number of Microsoft's contractual relationships. More specifically, we are interested in Microsoft's relationships with major Original Equipment Manufacturers; Internet/On-line Service Providers who participate in the Windows referral program or otherwise have prominent placement within the Windows boot-up sequence and/or environment; and Internet Content Providers who appear either on the Internet Explorer 4.0/Windows 98 "channel bar" or within one of the channels (excluding the channel guide). The Committee is, therefore, interested in working with Microsoft to identify the particular Microsoft contractual signatories to whom the clarifying letter would be sent. The Committee also is willing to review (on a confidential basis) sample licensing provisions that Microsoft believes contain particularly sensitive information; to hear why Microsoft has a legitimate interest in protecting the confidentiality of such information; and, to the extent the Committee agrees and determines that the information in these provisions is not relevant to the Committee's inquiry, to make clear to Microsoft's contractual signatories that this information should be redacted before any licenses are provided to the Committee.
2) Protection of information provided to the Committee: We would take appropriate steps to protect the confidentiality of information which Microsoft legitimately believes is commercially sensitive. In the event that the Committee receives commercially sensitive licensing information from Microsoft's contractual partners, as a result of a request made pursuant to and in connection with the clarifying letter, the Committee will protect the confidentiality of that information as follows:
(a) No disclosure of this confidential information shall be made by Committee staff or Members, unless specifically authorized by the Chairman, after consultation with the Ranking Member and reasonable notice to the companies that have requested confidential treatment.
(b) Only Committee Members, and designated Majority and Minority staff of the Full Committee and the Antitrust subcommittee, shall have access to such information.
The Committee may receive information independent of any requests made pursuant to the Clarifying Letter. Such independently obtained evidence will not be subject to the above mentioned protocol.
We appreciate your stated willingness to cooperate with the Committee on this matter. We request that the Clarifying Letter be provided to the Committee by Monday, April 6, and look forward to working with you in the coming days to facilitate your timely provision of the Clarifying Letter.
Orrin G. Hatch
Patrick J. Leahy
Ranking Member, Subcommittee on Antitrust, Business Rights, and Competition
Subcommittee on Antitrust, Business Rights, and Competition