Ex-Microsoft OEM Chief: How Windows 95 Led to Microsoft's Antitrust Era
- By Kurt Mackie
- January 23, 2013
A new book from a former Microsoft executive describes how Microsoft's Windows 95 product push later led to antitrust problems with the U.S. Department of Justice.
In Resolve and Fortitude: Microsoft's 'Secret Power Broker' Breaks His Silence, Joachim Kempin, who once served as senior vice president of Microsoft's OEM Division, describes how Microsoft pushed Windows 95 sales through its original equipment manufacturer (OEM) partners. The costs of Windows 95 for OEMs were tied to their efforts in promoting the OS to customers. Later, OEMs got incentives in the form of price breaks to push Microsoft's Internet Explorer browser, as well. It was that commercial tying between Windows and Internet Explorer that got the company involved in its U.S. antitrust problems.
Kempin's book appears to be unapologetic about Microsoft's legal fight against the federal government. Among other details, the book's dust jack promises that the book describes "how shady politicians and hapless competitors eventually goaded the Feds to ensnare Microsoft in a web of antitrust accusations." The book describes then-Attorney General Janet Reno as "a bumbling misfit," according to a Google Books preview.
The epithet, "secret power broker," may have come from veteran Microsoft reporter Mary Jo Foley, who wrote a 1998 profile of Kempin's role at the OEM Division, describing his place next to CEO Steve Ballmer during the antitrust inquiries. Foley described how Microsoft pushed its Market Development Agreement (MDA) licensing and marketing concept on OEMs to generate greater profits for the division. OEMs later told the Department of Justice that they were required by Microsoft's licensing agreements to ship Internet Explorer with each Windows 95 copy that they sold.
Microsoft was eventually found to be guilty as a "monopolist" for using its Windows market dominance to squeeze out other browser makers from the competition, in particular, Netscape Communications Corp. and its Navigator browser. The court's final judgment indicating monopoly abuse was filed on Nov. 12, 2002, but U.S. Department of Justice scrutiny over Microsoft with respect to the case continued for nearly nine years, ending on May 12, 2011.
Kempin, who worked at Microsoft from 1983 to 2002, recently told the Associated Press that Microsoft would need a management change "to really get back in the game seriously." He suggested demoting Ballmer to that effect, telling the AP that "Steve is a very good business guy, but make him a chief operating officer, not a CEO, and your business is going to go gangbusters." Kempin also suggested that Microsoft's board wasn't helping with the company's leadership, calling it a "lame duck board."
Kurt Mackie is senior news producer for 1105 Media's Converge360 group.