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Bill Gates has a Win 95 contract with Compaq for preloading Win 95 on Compaq PCs. The contract requires Compaq to preload Win 95 in the same form (without modification) in which Microsoft provides Win 95. That form includes Internet Explorer 3 (IE 3) as a component of the total software package. (This is something like the way Sun licensed Java to Microsoft, although not the way Microsoft distributed its version. Hence, the Sun vs. Microsoft suit.) Compaq wanted to ship some of its PCs with Netscape instead of IE, or at least to replace the IE 3 icon on the PC's Win 95 start-up screen with a Netscape icon. Microsoft told Compaq that if it did so, Microsoft would terminate Compaq's Win 95 license. Compaq backed down. The Department of Justice (DOJ) has charged Microsoft among other things, strong-arming Compaq. The government has asked the court to hold Microsoft in contempt of court. The critical question in this contempt proceeding is not whether Microsoft is violating the antitrust laws by what it is doing with IE and Win 95. The only issue is whether the 1995 consent judgment (consent decree) forbids what Microsoft is doing.
Date of Publication: Nov.-Dec. 1997