Apple Senior VP Avadis Tevanian, Jr. testified last week in the Microsoft antitrust trial. The Justice Department has posted his direct testimony, but unfortunately has done so in the form of three PDF-ized scans, each over 700K. Eric M. Bennett has done us the favor of excerpting some of the high points of Tevanian's testimony. They are posted here by permission.

The following material is Copyright © 1998 by Eric M. Bennett, <ericb at pobox dot com>.

Since the PDF file is over 2 megs (it is simply a digitized scan of documents), I have included some of the more relevant sections here. I omitted the information about Office and the QT [QuickTime -- ed.] patent lawsuit, since it didn't seem to contain any information that we have not already heard about.

Here are my excerpts:

"Mr. [Eric] Engstrom [of Microsoft's multimedia division] noted at the meeting that Microsoft's Bill Gates was not interested in an authoring program because the market for this product was too small. He assured the Apple representatives, however, that if Microsoft needed to make an investment in providing authoring tools in order to push Apple out of the [multimedia] playback market, then Microsoft would devote all the necessary resources to accomplish this goal."

---

"The problems we were experiencing in running QuickTime on Windows with IE 4.0--problems that had not existed with earlier versions of IE--suggested that Microsoft would use its control of Windows to harm QuickTime. I was particularly concerned about Microsoft's bundling of its multimedia technology with its IE for the Mac OS. This would give Microsoft access to the Mac OS operating system while, at the same time, Microsoft was seeking to exclude Apple's multimedia technology from Windows."

---

"On Feb 3, 1998, Mr. Jobs sent an email message to Mr. Gates expressing Apple's concerns about the threatening behavior of Microsoft's employees. On Feb 13, 1998, I had a lunch meeting in Cupertino with Don Bradford of Microsoft. The purpose of this meeting was to discuss the problems described in Mr. Jobs' message to Mr. Gates. At this meeting, Mr. Bradford conveyed the same proposal that Microsoft had presented in the past. Speficially, if Apple would abandon the playback segment of the business, Microsoft would be willing to endorse QuickTime as the solution for the authoring portion. Mr. Bradford told me that Mr. Gates thought that this would be a way to resolve our dispute."

---

"[In April 1998 Mr. Engstrom told Apple's Phil Schiller,] 'We're going to compete fiercly on multimedia playback, and we won't let anybody have playback in Windows. We consider that part of the operating system, so you're going to have to give up multimedia playback on Windows.'"

---

"Microsoft's proposal, the substance of which is contained in documents marked as Trial Exhibit 912, entitled QuickTime/DirectX Convergence Proposal, includes the following provisions: (1) the parties would cross-license their codecs to each other and collaborate on all future codecs, (2) Apple must adopt Microsoft's inferior DirectX run-time platform for Windows, (3) Apple must adopt Microsoft's inferior, proprietary streaming technology, and (4) Apple must adopt Microsoft's new, inferior AAF file format for authoring. Microsoft's proposal amounted to a forced abandonment of one of Apple's most successful and innovative products... Accordingly, Steve Jobs told Microsoft that Apple had no interest in giving up QuickTime. Microsoft's response conveyed a simple message: Microsoft would drive Apple out of the multimedia business."

---

"When Microsoft introduced IE 3.0, it touted the ability of its browser to use plug-ins developed for Netscape Navigator. After the introduction of IE 3.0, Apple was able to introduce a QuickTime plug-in that was fully compatible with both the Netscape Navigator and IE 3.0 browsers. However, with the successive releases of Microsoft's IE 4.0, MS Windows 98, and Microsoft multimedia software, Apple has seen steady degradation of QuickTime's capabiltiy to play back a variety of QuickTime-compatible media file formats while operating with Microsoft's IE running on the Windows operating system. The chart in attachment 4 illustrates the increasing degradation of QuickTime's performance as Microsoft has introduced greater technical incompatibilities between QuickTime and Microsoft products."

---

"Microsoft has used undocumented changes to the Windows registry to impair the ability of QuickTime to play numerous multimedia file types. In some cases, IE 4.0 bypasses QuickTime and uses Microsoft software to play a multimedia file from a web server. For many formats, the Microsoft software is not able to process the file at all. In other cases, the Microsoft software will play the file but with a severely degraded quality... In order to overcome these limitations imposed by Microsoft, Apple made a significant effort to reverse engineer the Windows registry software and the IE 4.0 registry preferences so that the multimedia file types would be properly associated with the QuickTime plug-in. Apple's efforts to correct these defects achieved only limited success. Thus, Apple was forced to ship a QuickTime product having degraded functionality for the Windows/IE 4.0 platform."

---

"We attempted to expedite cooperation with Microsoft by establishing a dialogue at the executive level of both companies... Mr. Pierry from Microsoft responded that Apple should be developing a Microsoft ActiveX control. Such a control was not necessary with IE 3.0, which supported industry standard plug-ins. ActiveX controls are Microsoft's proprietary format for extending the functionality of the system; ActiveX controls are supported only in Internet Explorer and only on the Windows operating system... [Mr. Schaaff of Apple inquired] whether there was any way to achieve QuickTime playback without rewriting everything as an ActiveX control... Mr. Schaaff received no response from Microsoft."

---

"Compaq first approached Apple to inquire about licensing opportunities for QuickTime 3 [around Feb 1998]... Mr. Federman [of Compaq] told Mr. Schiller [of Apple] that he was anxious to get QuickTime 3 onto the Presario products as soon as possible. Compaq's inquiry... followed Compaq's attendance at the SPA conference in late 1997. Microsoft had announced at the conference that it would henceforth support only its new multimedia APIs. This announcement meant that any existing software that worked to play multimedia through other APIs would not work with the new content types, such as digital video disks. As a result, content providers would have to re-author their content in order to sell their products as a DVD title using Microsoft's multimedia software. At the SPA conference, Apple presented its QuickTime software. Apple representatives explained that with the QuickTime 3 format, content providers could transfer their existing CD titles into a DVD product with relative ease."

---

"Mr. David Oblecz, a procurement engineer for Compaq's Presario division, approached Mr. Schiller's product manager, Mr. Steve Bannerman, and expressed excitement about QuickTime 3. [At a meeting with Compaq in Texas in March 1998,] the questions and statements that followed reflected a clear conflict between Compaq engineers and the Compaq marketing employees. On the one hand, the engineering partitipants expressed great excitement about the technology embodied in QuickTime 3. On the other hand, the comments made by Compaq's marketing managers showed some resistance to bundling any QuickTime product with Compaq computers."

---

"Mr Oblecz's frustration became so great that he stood up and explain to Compaq's marketing team that the technology paths Microsoft had chosen in the past had failed Compaq, and he doubted that Microsoft's latest strategy would fare any better. Mr. Oblecz stated that Apple had the solution in QuickTime, for which there was a much clearer opportunity for success... 'Compaq has been screwed before in multimedia by Microsoft,' Mr. Oblecz exclaimed, and he reiterated the point that Microsoft had made at the SPA conference."

---

"At the conclusion of the meeting, the Compaq engineering team stated that they were very pleased with what Apple had presented. As Mr. Schiller was leaving the meeting, Steven Decker, the Director of Procurement in the Presario Division, came up to him and said, 'You have to understand what's going on here. They're very afraid of doing anything to upset Microsoft. We are very wary of bundling anything that would upset Microsoft because they touch us in so many places.' As week after the meeting, Apple was informed that Compaq had decided not to move forward with any licensing plan for QuickTime 3. Compaq, moreover, had also decided to remove all QuickTime products that were currently being bundled with its computers."

---

"Microsoft has pressured AVID, a video software producer, to stop supporting QuickTime or face the loss of Microsoft's assistance in the sale of Avid's new video products. [In a meeting with Cliff Jencks of AVID, Apple's Schiller] asked Mr. Jencks to provide an example of such pressure from Microsoft. Mr. Jencks explained that Microsoft was about to announce a new channel for selling software and that channel would be part of the Windows 98 ("Memphis") products. This new software channel, he was told, would allow ISVs to sell software to users directly from the user's desktop. Mr. Jencks told Mr. Schiller that he had approached Microsoft and the Memphis team about being part of the new software channel to sell their Cinema software. The Memphis team told him that as long as Cinema supported QuickTime, his product would not be part of that sales channel. Mr. Jencks explained that he attempted to explore with Microsoft the possibility of AVID developing new products for the software channel. He was told by Microsoft, 'That's not good enough. You need to rip QuickTime out of your product if you want to be in this channel.'... Microsoft's pressure obviously succeeded. On April 6, 1998, at the meeting of the National Association of Broadcasters, Microsoft introduced its AAF format for multimedia authoring. Joining Microsoft as a partner in this announcement was AVID."

---

"As my testimony illustrates, 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."

---

Eric Bennett (http://www.pobox.com/~ericb/)
Cornell University, Field of Biochemistry
377 Olin Chemistry Lab