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Deposition of Compaq's Stephen Decker

Deposition of Compaq's Stephen Decker

The following are excerpts of sworn testimony of Stephen Decker, director of software procurement at Compaq Computer, in which he says Microsoft threatened to terminate the software vendor's license for Windows 95 unless it carried the Internet Explorer icon.

Q. From the user's perspective, what is the difference between taking the icon off and taking the code off?

A. Taking the icon off means that the consumer would have to be a little more savvy and knowledgeable and actually find the application by going through some programs and file folders versus having an icon on the desktop that can just be point and click.

Q. Why did Compaq want to remove the Internet Explorer icon at that time?

A. At the time, we had a relationship with Netscape and we had been shipping their product for awhile. And therefore Netscape was actually the browser partner and we wanted to give that position on the Compaq Presario desktop.

Q. How did Microsoft respond to Compaq removing the Internet Explorer icon form the desktop?

A. Well, when they found out about it, they sent a letter to us telling us that, you know, they would terminate our agreement for doing so.

Examination by Mr. Holtzman:
Q. Did you have any understanding as to the basis for them threatening to or suggesting they would terminate the license agreement?

A. Yes. Well, I believe that the reason for Microsoft wanting that was because the icon represents the ease of use for the customer, and so therefore with the icon of the Internet Explorer visible and available to the consumer, they would naturally migrate to that particular product versus any other product that would be in a file folder.

Q. I understand.

Let me ask the question a different way, although I appreciate that answer.

Do you have any understanding as to the legal basis or what's in the license agreement that forms the basis for Microsoft's or at that time formed the basis for Microsoft threatening to terminate the license?

A. Okay.

I believe that from Microsoft's perspective, is they ship code to us and that code included the Internet Explorer with an icon on the desktop, and Compaq changed that code to remove that., so Microsoft's contention was that Compaq didn't have the right to remove that code, that particular piece of code.

By Ms. Giulianelli:
Q. And Microsoft sent Compaq a letter. You have in front of you a letter which has been Bates stamped MSZ 0004947 which I am labeling Deposition Exhibit Number 1.

(The document referred to was marked for identification as Deposition Exhibit Number 1)

Q. Is that the letter Microsoft sent to Compaq?

A. Yes, I believe that is correct.

Q. Were you told by someone within Compaq that Microsoft has sent a letter threatening to terminate the license agreement?

A. Yes, I was. However, it was after the fact.

Q. After Compaq received the letter from Microsoft threatening to terminate the license agreement, what did Compaq do?

A. We went back and reworked the code so that we put an icon back on.

Q. That was a direct result of the threat to terminate the license agreement?

A.Yes, I believe that is correct. (Pause.)

Q. Are you familiar with the new version of Internet Explorer called Internet Explorer 4.0?

A. Yes.

Q. Is Compaq currently shipping Internet Explorer 4.0 on a separate CD pursuant to a memorandum of understanding with Microsoft?

A. Yes, we are.

Q. Has Compaq considered other options such as the Netscape Netcaster?

A. Not that I'm aware of.

Ms. Giulianelli: Could we go off the record for one second?

(Discussion off the record.)

Ms. Giulianelli: We're back.

By Ms. Giulianelli:
Q. Why has Compaq, to your knowledge, not considered Netcaster today as an alternative to Internet Explorer 4.0?

A. I would say that the major reason that Compaq hasn't is because the category of browser is now fulfilled with the Internet Explorer product which will be a part of the Microsoft operating system. Therefore, Compaq will get this as part of the operating system code and that category will be filled. So therefore we would not have to go out and negotiate something separately and potentially pay some fees, and also take up additional real estate on our hard drive.

Ms. Giulianelli: Thank you, Mr. Decker.