Why Microsoft Bound Internet Explorer to Windows: A Look Into Microsoft's Actions

155. In contrast to other operating system vendors, Microsoft both refused to license its operating system without a browser and imposed restrictions — at first contractual and later technical — on OEMs’ and end users’ ability to remove its browser from its operating system.

     
     

     As its internal contemporaneous documents and licensing practices reveal, Microsoft decided to bind Internet Explorer to Windows in order to prevent Navigator from weakening the applications barrier to entry, rather than for any pro-competitive purpose.

     
     

156. Before it decided to blunt the threat that Navigator posed to the applications barrier to entry, Microsoft did not plan to make it difficult or impossible for OEMs or consumers to obtain Windows without obtaining Internet Explorer.

     
     

     In fact, the company’s internal correspondence and external communications indicate that, as late as the fall of 1994, Microsoft was planning to include low-level Internet “plumbing,” such as a TCP/IP stack, but not a browser, with Windows 95.

157. Microsoft subsequently decided to develop a browser to run on Windows 95. As late as June 1995, however, Microsoft had not decided to bundle that browser with the operating system. The plan at that point, rather, was to ship the browser in a separate “frosting” package, for which Microsoft intended to charge.

     
     

     By April or May of that year, however, Microsoft’s top executives had identified Netscape’s browser as a potential threat to the applications barrier to entry. Throughout the spring, more and more key executives came to the conclusion that Microsoft’s best prospect of quashing that threat lay in maximizing the usage share of Microsoft’s browser at Navigator’s expense.

     
     

     The executives believed that the most effective way of carrying out this strategy was to ensure that every copy of Windows 95 carried with it a copy of Microsoft’s browser, then code-named “O’Hare.”

     
     

     For example, two days after the June 21, 1995 meeting between Microsoft and Netscape executives, Microsoft’s John Ludwig sent an Email to Paul Maritz and the other senior executives involved in Microsoft’s browser effort. “[O]bviously netscape does see us as a client competitor,” Ludwig wrote. “[W]e have to work extra hard to get ohare on the oem disks.”

     
     

158. Microsoft did manage to bundle Internet Explorer 1.0 with the first version of Windows 95 licensed to OEMs in July 1995. It also included a term in its OEM licenses that prohibited the OEMs from modifying or deleting any part of Windows 95, including Internet Explorer, prior to shipment.

     
     

     The OEMs accepted this restriction despite their interest in meeting consumer demand for PC operating systems without Internet Explorer. After all, Microsoft made the restriction a non-negotiable term in its Windows 95 license, and the OEMs felt they had no commercially viable alternative to pre-installing Windows 95 on their PCs.

     
     

     Apart from a few months in the fall of 1997, when Microsoft provided OEMs with Internet Explorer 4.0 on a separate disk from Windows 95 and permitted them to ship the latter without the former, Microsoft has never allowed OEMs to ship Windows 95 to consumers without Internet Explorer.

     
     

     This policy has guaranteed the presence of Internet Explorer on every new Windows PC system.

     
     

159. Microsoft knew that the inability to remove Internet Explorer made OEMs less disposed to pre-install Navigator onto Windows 95. OEMs bear essentially all of the consumer support costs for the Windows PC systems they sell.

     
     

     These include the cost of handling consumer complaints and questions generated by Microsoft’s software. Pre-installing more than one product in a given category, such as word processors or browsers, onto its PC systems can significantly increase an OEM’s support costs, for the redundancy can lead to confusion among novice users.

     
     

     In addition, pre-installing a second product in a given software category can increase an OEM’s product testing costs. Finally, many OEMs see pre-installing a second application in a given software category as a questionable use of the scarce and valuable space on a PC’s hard drive.

     
     

160. Microsoft’s executives believed that the incentives that its contractual restrictions placed on OEMs would not be sufficient in themselves to reverse the direction of Navigator’s usage share. Consequently, in late 1995 or early 1996, Microsoft set out to bind Internet Explorer more tightly to Windows 95 as a technical matter.

     
     

     The intent was to make it more difficult for anyone, including systems administrators and users, to remove Internet Explorer from Windows 95 and to simultaneously complicate the experience of using Navigator with Windows 95.

     
     

     As Brad Chase wrote to his superiors near the end of 1995, “We will bind the shell to the Internet Explorer, so that running any other browser is a jolting experience.”

161. Microsoft bound Internet Explorer to Windows 95 by placing code specific to Web browsing in the same files as code that provided operating system functions.

     
     

     Starting with the release of Internet Explorer 3.0 and “OEM Service Release 2.0" (“OSR 2") of Windows 95 in August 1996, Microsoft offered only a version of Windows 95 in which browsing-specific code shared files with code upon which non-browsing features of the operating system relied.

162. The software code necessary to supply the functionality of a modern application or operating system can be extremely long and complex. To make that complexity manageable, developers usually write long programs as a series of individual “routines,” each ranging from a few dozen to a few hundred lines of code, that can be used to perform specific functions.

     
     

     Large programs are created by “knitting” together many such routines in layers, where the lower layers are used to provide fundamental functionality relied upon by higher, more focused layers. Some preliminary aspects of this “knitting” are performed by the software developer.

     
     

     The user who launches a program, however, is ultimately responsible for causing routines to be loaded into memory and executed together to produce the program’s overall functionality.

163. Routines can be packaged together into files in almost any way the designer chooses. Routines need not reside in the same file to function together in a seamless fashion.

     
     

     Also, a developer can move routines into new or different files from one version of a program to another without changing the functionalities of those routines or the ability to combine them to provide integrated functionality.

164. Starting with Windows 95 OSR 2, Microsoft placed many of the routines that are used by Internet Explorer, including browsing-specific routines, into the same files that support the 32-bit Windows APIs.

     
     

     Microsoft’s primary motivation for this action was to ensure that the deletion of any file containing browsing-specific routines would also delete vital operating system routines and thus cripple Windows 95.

     
     

     Although some of the code that provided Web browsing could still be removed, without disabling the operating system, by entering individual files and selectively deleting routines used only for Web browsing, licensees of Microsoft software were, and are, contractually prohibited from reverse engineering, decompiling, or disassembling any software files.

     
     

     Even if this were not so, it is prohibitively difficult for anyone who does not have access to the original, human-readable source code to change the placement of routines into files, or otherwise to alter the internal configuration of software files, while still preserving the software’s overall functionality.

     
     

165. Although users were not able to remove all of the routines that provided Web browsing from OSR 2 and successive versions of Windows 95, Microsoft still provided them with the ability to uninstall Internet Explorer by using the “Add/Remove” panel, which was accessible from the Windows 95 desktop.

     
     

     The Add/Remove function did not delete all of the files that contain browsing specific code, nor did it remove browsing-specific code that is used by other programs. The Add/Remove function did, however, remove the functionalities that were provided to the user by Internet Explorer, including the means of launching the Web browser.

     
     

     Accordingly, from the user’s perspective, uninstalling Internet Explorer in this way was equivalent to removing the Internet Explorer program from Windows 95.

166. In late 1996, senior executives within Microsoft, led by James Allchin, began to argue that Microsoft was not binding Internet Explorer tightly enough to Windows and as such was missing an opportunity to maximize the usage of Internet Explorer at Navigator’s expense. Allchin first made his case to Paul Maritz in late December 1996. He wrote:

     
     

I don’t understand how IE is going to win. The current path is simply to copy everything that Netscape does packaging and product wise. Let’s [suppose] IE is as good as Navigator/Communicator. Who wins? The one with 80% market share. Maybe being free helps us, but once people are used to a product it is hard to change them. Consider Office. We are more expensive today and we’re still winning. My conclusion is that we must leverage Windows more. Treating IE as just an add-on to Windows which is cross-platform [means] losing our biggest advantage — Windows marketshare. We should dedicate a cross group team to come up with ways to leverage Windows technically more. . . . We should think about an integrated solution — that is our strength.

Allchin followed up with another message to Maritz on January 2, 1997:

You see browser share as job 1. . . . I do not feel we are going to win on our current path. We are not leveraging Windows from a marketing perspective and we are trying to copy Netscape and make IE into a platform. We do not use our strength — which is that we have an installed base of Windows and we have a strong OEM shipment channel for Windows. Pitting browser against browser is hard since Netscape has 80% marketshare and we have <20%. . . . I am convinced we have to use Windows — this is the one thing they don’t have. . . . We have to be competitive with features, but we need something more — Windows integration.

If you agree that Windows is a huge asset, then it follows quickly that we are not investing sufficiently in finding ways to tie IE and Windows together. This must come from you. . . . Memphis [Microsoft’s code-name for Windows 98] must be a simple upgrade, but most importantly it must be killer on OEM shipments so that Netscape never gets a chance on these systems.

167. Maritz responded to Allchin’s second message by agreeing “that we have to make Windows integration our basic strategy” and that this justified delaying the release of Windows 98 until Internet Explorer 4.0 was ready to be included with that product. Maritz recognized that the delay would disappoint OEMs for two reasons.

     
     

     First, while OEMs were eager to sell new hardware technologies to Windows users, they could not do this until Microsoft released Windows 98, which included software support for the new technologies. Second, OEMs wanted Windows 98 to be released in time to drive sales of PC systems during the back-to-school and holiday selling seasons.

     
     

     Nevertheless, Maritz agreed with Allchin’s point that synchronizing the release of Windows 98 with Internet Explorer was “the only thing that makes sense even if OEMs suffer.”

     
     

168. Once Maritz had decided that Allchin was right, he needed to instruct the relevant Microsoft employees to delay the release of Windows 98 long enough so that it could be shipped

     with Internet Explorer 4.0 tightly bound to it.

     
     

     When one executive asked on January 7, 1997 for confirmation that “memphis is going to hold for IE4, even if it puts memphis out of the xmas oem window,” Maritz responded affirmatively and explained,

The major reason for this is . . . to combat Nscp, we have to [] position the browser as “going away” and do deeper integration on Windows. The stronger way to communicate this is to have a ‘new release’ of Windows and make a big deal out of it. . . . IE integration will be [the] most compelling feature of Memphis.

Thus, Microsoft delayed the debut of numerous features, including support for new hardware devices, that Microsoft believed consumers would find beneficial, simply in order to protect the applications barrier to entry.

169. Allchin and Maritz gained support for their initiative within Microsoft in the early spring of 1997, when a series of market studies confirmed that binding Internet Explorer tightly to Windows was the way to get consumers to use Internet Explorer instead of Navigator. Reporting on one study in late February, Microsoft’s Christian Wildfeuer wrote:

The stunning insight is this: To make [users] switch away from Netscape, we need to make them upgrade to Memphis. . . . It seems clear to me that it will be very hard to increase browser market share on the merits of IE 4 alone. It will be more important to leverage the OS asset to make people use IE instead of Navigator.

Microsoft’s survey expert, Kumar Mehta, agreed. In March he shared with a colleague his “feeling, based on all the IE research we have done, [that] it is a mistake to release memphis without bundling IE with it.”

170. Microsoft’s technical personnel implemented Allchin’s “Windows integration” strategy in two ways. First, they did not provide users with the ability to uninstall Internet Explorer from Windows 98.

     
     

     The omission of a browser removal function was particularly conspicuous given that Windows 98 did give users the ability to uninstall numerous features other than Internet Explorer — features that Microsoft also held out as being integrated into Windows 98. Microsoft took this action despite specific requests from Gateway that Microsoft provide a way to uninstall Internet Explorer 4.0 from Windows 98.

     
     

171. The second way in which Microsoft’s engineers implemented Allchin’s strategy was to make Windows 98 override the user’s choice of default browser in certain circumstances. As shipped to users, Windows 98 has Internet Explorer configured as the default browser.

     
     

     While Windows 98 does provide the user with the ability to choose a different default browser, it does not treat this choice as the “default browser” within the ordinary meaning of the term.

     
     

     Specifically, when a user chooses a browser other than Internet Explorer as the default, Windows 98 nevertheless requires the user to employ Internet Explorer in numerous situations that, from the user’s perspective, are entirely unexpected.

     
     

     As a consequence, users who choose a browser other than Internet Explorer as their default face considerable uncertainty and confusion in the ordinary course of using Windows 98.

172. Microsoft’s refusal to respect the user’s choice of default browser fulfilled Brad Chase’s 1995 promise to make the use of any browser other than Internet Explorer on Windows “a jolting experience.”

     
     

     By increasing the likelihood that using Navigator on Windows 98 would have unpleasant consequences for users, Microsoft further diminished the inclination of OEMs to pre-install Navigator onto Windows.

     
     

     The decision to override the user’s selection of non- Microsoft software as the default browser also directly disinclined Windows 98 consumers to use Navigator as their default browser, and it harmed those Windows 98 consumers who nevertheless used Navigator.

     
     

     In particular, Microsoft exposed those using Navigator on Windows 98 to security and privacy risks that are specific to Internet Explorer and to ActiveX controls..

     
     

173. Microsoft’s actions have inflicted collateral harm on consumers who have no interest in using a Web browser at all. If these consumers want the non-browsing features available only in Windows 98, they must content themselves with an operating system that runs more slowly than if Microsoft had not interspersed browsing-specific routines throughout various files containing routines relied upon by the operating system.

     
     

     More generally, Microsoft has forced Windows 98 users uninterested in browsing to carry software that, while providing them with no benefits, brings with it all the costs associated with carrying additional software on a system.

     
     

     These include performance degradation, increased risk of incompatibilities, and the introduction of bugs.

     
     

     Corporate consumers who need the hardware support and other nonbrowsing features not available in earlier versions of Windows, but who do not want Web browsing at all, are further burdened in that they are denied a simple and effective means of preventing employees from attempting to browse the Web.

174. Microsoft has harmed even those consumers who desire to use Internet Explorer, and no other browser, with Windows 98. To the extent that browsing-specific routines have been commingled with operating system routines to a greater degree than is necessary to provide any consumer benefit, Microsoft has unjustifiably jeopardized the stability and security of the operating system.

     
     

     Specifically, it has increased the likelihood that a browser crash will cause the entire system to crash and made it easier for malicious viruses that penetrate the system via Internet Explorer to infect non-browsing parts of the system.

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This court case Civil Action No. 98-1232 (TPJ) retrieved on 2-07-2023, from justice.gov is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction.