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Compaq defends Microsoft
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February 16, 1999: 2:03 p.m. ET
Exec says MSFT accepted inclusion of Netscape browser on Windows desktop
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NEW YORK (CNNfn) - A Compaq Computer Corp. executive testified that Microsoft Corp. did not object to the inclusion of a rival browser on the opening screen of Compaq's desktop computers, refuting a key government charge that the software giant's contracts with PC makers are exclusionary.
The presence of John Rose, Compaq (CPQ) senior vice president and general manager of the company's enterprise computing group, is significant for both sides of the federal antitrust trial in Washington because he is the only representative from a computer maker.
Among the charges levied by the Justice Department and 19 states is that Microsoft 's (MSFT) contracts with PC makers is unfair to Netscape Communications Corp. (NSCP). While Microsoft offered its Internet Explorer Web browser for free as part of the Windows operating system, Netscape was charging PC makers a licensing fee for its competing Navigator product.
The government cites this as just one example of how Microsoft has attempted to extend its Windows monopoly into other segments of the computer industry.
Microsoft ordered changes
According to Rose's written direct testimony, which Microsoft released Tuesday, Compaq removed the Internet Explorer and Microsoft Network (MSN) icons from the opening screen of the Presario line of PCs after signing a deal with America Online Inc. (AOL) in early 1996.
The contract specified that Compaq position AOL as its "featured online service provider" and AOL's GNN service as the "featured direct Internet service provider."
"No other online services will have icons on the desktop," the AOL contract stipulated.
Rose noted that AOL provided Compaq with a bounty for each customer who signed up to buy AOL's services.
After Microsoft informed Compaq that the removal of its icons was a violation of Compaq's license agreement, the computer maker returned the icons to the Windows desktop.
No objection to Netscape
The government claims such an episode is an example of how Microsoft uses its monopoly power to bully PC makers into giving its software preferential placement on a computer's opening screen.
Rose, however, said Compaq told Microsoft it would include icons for AOL and Netscape Navigator alongside Microsoft's offerings on the Presario's desktop.
"Microsoft did not object to Compaq's inclusion of the Netscape Navigator icon on the Presario desktop," Rose said. "Microsoft in no way limits Compaq in its license agreements… from including Netscape's icon."
Rose will take the stand when the government concludes its cross examination of Brad Chase, vice president of Microsoft's personal and business systems division.
Microsoft shares were unchanged at 157-3/4 in midday trade. 
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